Muthoot Finance Got In-Principal Approval from RBI to Establish White Label ATMs
Muthoot Finance got in-principal approval from the Reserve Bank of India (RBI) for establishing as well as operating White Label ATMs (WLAs).
Muthoot Finance got in-principal approval from the Reserve Bank of India (RBI) for establishing as well as operating White Label ATMs (WLAs). The White Label ATMs (WLAs) are the ones which are not owned and operated by the bank but by another non-bank entity. By paying a stipulated fee, anyone can use it for the purpose of financial transaction with any other bank branch.
As the part of RBI’s Scheme A, Muthoot decided to establish 9000 ATMs. According to this scheme, Muthoot Finance will establish 1000 ATMs in first year, 2000 in second year and 6000 in third year.
Muthoot Finance already began the process of identification of sponsor banks. Apart from this, the company has also decided to finalise the network of ATMs all over India. RBI decided to have more WLAs in tier-III to tier-VI centres of Muthoot Finance.
RBI guidelines under Scheme A
• Under this scheme, RBI gives the approval in case a company establishes a minimum of 1000 ATMs in first year, twice the number of first year in second year as well as thrice the second year’s installation in third year.
• Under the Scheme A, for every 3 WLAs installed in tier-III to VI centres, one WLA is allowed to be installed in tier-I to II centres. Out of the total WLAs installed in tiers-III to VI centres, at least 10 percent should be installed in tier-V & VI centres.
• As of now, only the banks were allowed to establish the ATMs as the extended delivery channels. Then, RBI allowed even the non-banking entities to establish, own as well as operate the WLAs for expansion reach in tiers-III to VI.