RBI Forms Panel to Review Fee Structure for White-Label ATMs
The Reserve Bank of India (RBI) has established a committee to review the fee structure of white-label ATMs (WLAs). This panel aims to evaluate current policies and recommend a balanced and sustainable model for all stakeholders.
The committee will analyze the fee structure, existing ATM infrastructure, and international best practices.
The primary issue is the interchange fee, which is currently the same for both bank-operated ATMs and WLAs. This has led to unsustainable operations due to reduced ATM transactions with the rise of digital banking.
India’s ATM market is projected to grow at a compound annual growth rate (CAGR) of 9.2% from 2024 to 2032.
The committee includes representatives from leading banks, ATM manufacturers, and the National Payments Corporation of India (NPCI), and is chaired by Indian Banks’ Association CEO Sunil Mehta.
Since 2012, the RBI has allowed non-banking entities to establish WLAs to increase the number of ATMs, particularly in rural areas.
In 2016, WLAs were permitted to source cash from retail establishments, and in 2019, they were allowed on-tap authorization.
WLA operators have suggested raising the interchange fee to ₹30 for financial transactions and ₹10 for non-financial transactions, along with considering access or convenience fees.
WLAs offer account information, mini/short statement generation, cash withdrawals, and PIN changes.
WLAs do not provide cash deposits, regular bill payments, or mobile recharge services, unlike bank ATMs which offer additional services like personal loan applications, tax payments, railway ticket booking, and more.
The RBI has been working since 2018 to encourage more participation in retail payment platforms, including WLAs. The ‘on tap’ authorization is part of this effort to diversify risk, foster innovation, and boost competition.
The RBI has engaged in public consultations to gather feedback and minimize concentration risk in retail payment systems, aiming to expand the geographical spread of ATMs and improve customer services, especially in rural areas.
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