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100% FDI for White Label ATMs
Sep 14, 2015

In a bid to enhance financial inclusion, the Central Government permitted 100% foreign direct investment (FDI) under the automatic route for white label ATM operations. This decision will ease and expedite foreign investment inflows in the activity and thus give a fillip to the government's effort to promote financial inclusion in the country, including the Pradhan Mantri Jan Dhan Yojna.

  • White labeled ATMs are set up by private non-banking companies that own and operate their own brand of ATMs.

  • It is expected that consequent to ease of investing in India, adequate funds would be available in white label ATM operations, it said.

  • This would help in government's objective of enhancing ATM networks in semi-urban and rural areas.

  • Participation of foreign investors in the sector will contribute to furthering financial inclusion.

  • Till date, FDI in white label ATM operations was allowed through the government approval route. 

  • This required some processing time and projects were delayed, dissuading investors from investing in such critical areas.

  • The companies seeking to set up such ATMs would have to follow certain conditions, including a minimum net worth of Rs 100 crore.

  • White-label ATM operators are non-bank companies who own and run ATMs as a business. Their revenue is mainly from inter-change fee and advertisements. 

  • There are seven white-label ATM players in the country that are operating 10,133 ATMs as of August 2015. 

  • The total number of ATMs in the country are 2,07,919. 

The white label ATMs are likely to benefit customers as well as banks. With the expansion of ATM network, customers will be able to withdraw funds at more locations which will be convenient and located near to their home or place of work. Banks too support introduction of white label ATMs as such machines are likely to reduce pre-transaction cost for them and will be free from the problems relating to maintaining and running such a payment channel.


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