RBI gives nod to Muthoot Finance to set up White Label ATMs
Indian gold loan company Muthoot Finance Ltd has obtained the RBI’s in-principle approval to set up the white label ATMs,as the government seeks to take financial services to the remote regions of the country.
What are White Label ATMs?
ATMs set up and run by non-banking entities are called White Label ATMs (WLAs). Earlier, only banks were allowed to establish and operate ATMs. RBI had allowed the company under the guidelines it released in June 2012 which set certain minimum net worth and obligation for permitting independent non-banking firms to operate such ATMs, as per three different schemes.
The Muthoot Finance has been given approval as per Scheme A under which Muthoot Finance will set up WLAs, a minimum of 1,000 WLAs have to be installed in the first year; a minimum of twice the number of WLAs installed in the first year have to be installed in the second year; and a minimum of three times the number of WLAs installed in the second year have to be installed in the third year.
What is the purpose of this move?
The fundamental objective of permitting non-banks to operate WLAs is to enhance the penetration of the machines in semi-urban and rural areas, where bank-run ATMs are a few or none. The move is in line to the governments objective of achieving financial inclusion.