White Label ATMs

White Label ATMs (WLAs) are installed, owned, and run by entities other than banks. They are authorized by the Reserve Bank of India under the Payment & Settlement Systems Act, 2007. White Label ATMs were installed to increase the number of ATMs in the country to enhance the financial inclusion in the country. It is a one stop solution with the aim to provide various services to customers apart from just dispensing the cash. RBI has taken various steps to increase the reach of WLAs in the country like it has mandated that Companies falling under the WLA category are mandated to run 33% of their ATMs in urban areas, which includes tier I and II cities, and 67% of their ATMs in rural areas.

Rural areas have been left behind because they have little or no access to credit, low financial education and complicated banking process. Due to lack of financial literacy, they are not able to make informed financial decision. In rapid development, rural areas were left behind. This is why government is actively undertaking financial inclusion initiatives. Financial inclusion means access to basic financial services like savings, credit, insurance, and payments to traditionally excluded people and empower them to fully participate in the economy. Reserve Bank of India (RBI) to boost ATM penetration allowed non-bank companies to set up, own and operate White Label ATMs (WLAs) in the country.

The Reserve Bank of India (RBI) is themonetary regulator of the country. In an effort to increase financial inclusion in the country they have allowed setting up White Label ATMs (WLAs). While usually ATMs are set up by recognised banks, these ATMs are set up by non-banking companies. This was done to increase ATM penetration in the country. Companies falling under the WLA category are mandated to run 33% of their ATMs in urban areas, which includes tier I and II cities, and 67% of their ATMs in rural areas.

WLAs provide banking services to the customers of banks in India, based on the credit and debit card issued by banks.

1. Account Information
2. Deposit of Cash
3. Release of Cash
4. Regular Bill Payment
5. Mini Statement Generation
6. PIN Change
7. Request for Cheque Book

RBI has allowed White Label ATM Operators:

1. To overcome the issue of cash constraints by obtaining cash from retail establishments.
2. To purchase wholesale currency directly from Currency Chests and Reserve Bank Issue Offices for amounts above a certain threshold.
3. To procure funds from any scheduled bank .
4. To display advertisements related to non- financial products.
5. To offer bill payment and interoperable cash deposit services.
6. To co-brand ATM cards in collaboration with the approved WLAOs.

• Eliminate the need to visit the bank: White Label ATMs are beneficial to customers since they remove the need for frequent trips to a bank branch for basic services.
• Availability: There is round the clock availability of White Label ATMse 24 hours a day, seven days a week even including holidays.
• Lower operational costs: Banks benefit from WLAs as they do not have to maintain a huge manpower in branches for doing similar tasks. It reduces the operating expenditures of their branches.
• Financial inclusion: It increases financial inclusion of rural, semi-urban, and low-income people and a larger number of vulnerable people.

• Unsuccessful transactions: One of major issues faced by WLAs is frequent transaction failure.
• Long time for dispute resolution: Dispute resolution method in any case regarding WLAs can include three entities, i.e. WLA operator, the WLA operator’s sponsor bank, and the customer’s bank which makes the process longer.
• Cost issue: The pricing related to WLAs will deter customers because they will have to pay a fee to use the White Label ATMs as there are only a certain number of free transactions allowed on the WLAs.
• Financial viability: The financial viability of WLAs is a matter of concern because of their low interchange charge and hefty operational expenses.
• Competition with bank ATMs: There is an overpowering competition with bank ATMs as if there is a bank-managed ATM in the same area as a WLA ATM, the White Label ATMs may not be able to generate a profit.

• Pradhan Mantri Jan Dhan Yojana: It is a national financial inclusion mission started in 2014. It aims to ensure easy access to financial services like credit, insurance, savings and deposit accounts, and remittances to every citizen.
• Direct Benefit Transfer: It enables the government to deposit subsidies and other benefits straight into recipients bank accounts. It was launched in 2010 to improve delivery efficiency and decrease corruption.
• Aadhaar Enabled Payment System: It is an electronic payment system that uses biometric identification to allow users to send and receive money using their unique Aadhaar number.
• Priority Sector Lending (PSL): The Reserve Bank of India (RBI) has assigned the banks a significant role in which they are to allocate a certain percentage of bank loans to a small number of targeted industries.Sectors include: (1) Agriculture (2) Micro, Small and Medium Enterprises (3) Export Credit (4) Education (5) Housing (6) Social Infrastructure (7) Renewable Energy (8) Others.
• Cooperatives: These are people-centered businesses owned, managed, and operated by their members in order to fulfil their shared needs and goals. Under cooperatives, people come together in a democratic and equitable manner.

• The term "white goods" refers to large domestic appliances for regular use that are durable in nature. It includes a broad range of products, like refrigerators, washing machines, dryers, and dishwashers.
• Whereas, White label ATMs are financial instruments owned by authorized operators for financial inclusion and ease of transaction.

White Label ATMs (WLAs) have played a significant role in increasing financial inclusion in India by providing rudimentary banking services in rural and remote areas. While they offer benefits such as convenience, availability, and lower operational costs for banks, they also face challenges such as transaction failures, long dispute resolution times, and financial viability concerns. To ensure the continued success of WLAs, it is crucial to address these limitations through measures such as improving infrastructure, streamlining dispute resolution processes, and exploring alternative revenue models.