Private-party ATMs to come up soon
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The Reserve Bank of India on Tuesday issued draft rules for 'white label' ATMs — to be set up by private service providers, and not owned or linked to any bank.
Customers of any bank can withdraw money from such ATMs, and the machines will display the charges that will be levied on transactions beforehand on their display screens.
But white-label ATM operators will not be entitled to any charges other than the interchange fee payable under the current system.
Currently, only the first five transactions in a month at ATMs not belonging to one's bank are free and all subsequent transactions are charged @Rs 20 per transaction. Customers can make any number of transactions at ATMs belonging to their bank.
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Globally, surcharge on white ATM transactions depends on the location of the machine. So, if there are more customers of a particular bank near an ATM, the charges for them will be lower compared with customers of other banks.
The central bank has allowed white-label ATM operators to choose the locations to offer the service. However, annual targets and ratio of ATMs in between Tier I & II and Tier III-VI centres will be stipulated by the RBI, and cards for such transactions will be only issued by banks.
The main worry for the RBI was of grievance redressal. According to the guidelines, any failed ATM transaction will be the responsibility of the card-issuing bank.
Another concern was cash management, for the regulator feared counterfeit currency entering the system.
So, the RBI has stipulated that cash management will be the responsibility of one "sponsor bank", which shall be declared by the white-label ATM operator.
The RBI has invited comments on or before March 6.
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