Cabinet may decide on automatic FDI route for white label ATMs
New Delhi: The Union cabinet is expected to take a decision tomorrow on permitting 100 per cent foreign direct investment (FDI) in white labelled ATM operations under the automatic route, a move aimed at promoting financial inclusion, officials said.
The proposal was mooted by the Commerce and Industry Ministry. It aims at increasing the number of Automated Teller Machines (ATMs) in smaller cities and towns, enhancing financial inclusion in the country, said an official.
As per the current policy, foreign investment is allowed under the government approval route.
According to RBI guidelines, white labelled ATMs to be set up by non-bank entities would provide banking services to customers, based on cards (debit/credit/prepaid) issued by banks.
White labelled ATMs are set up by private non-bank companies that own and operate their own brand of ATMs.
As per the guidelines, the non-bank entities must have networth of at least Rs 100 crore.
White label ATM operators in the country include AGS, Srei Infrastructure Finance Ltd, Muthoot Finance and Vakrangee Software.
Currently, there are over 1.82 lakh ATMs operated by 54 public, private and foreign banks in the country.
The government has already relaxed the FDI policy in sectors including defence, railways and construction to boost foreign investment in the country.
In 2014-15, FDI into the country increased by 27 per cent to USD 30.93 billion.
Till June 2012, only banks were permitted to set up ATMs, which they were setting up mainly in tier-I and II cities. The Reserve Bank later allowed non-bank entities to set up, own and operate ATMs in India.