In view of the difficulties being faced by White Label ATM Operators in sourcing cash from their sponsor bank(s) following demonetisation of high denomination Rs. 500 and Rs. 1,000 bank notes, the Reserve Bank of India has allowed them to source cash from retail outlets, subject to conditions.
The operations of WLAOs virtually came to a standstill as their ATMs hardly got any cash from their sponsor bank(s) after demonetisation of high denomination bank notes was announced on November 8.
Among the conditions prescribed by the RBI to source cash from retail outlets is a clause that WLAOs will be solely responsible for the quality and genuineness of currency notes dispensed through their ATMs. Only ATM fit notes can be used for this purpose.
WLAOs may enter into bilateral arrangement with retail outlets from where they desire to source cash based on their board-approved policy. Liability and disputes, if any, arising out of such arrangements will be the responsibility of WLAOs
These ATM operators will be responsible for resolving customer disputes and ill make good any loss caused to a customer including those on account of fake notes.
Sixty per cent of the cash sourced using such arrangement(s) shall be dispensed through WLAs located in rural and semi-urban areas.
As there was a need to expand the reach of ATMs in Tier III to VI centres (classification of centres as prescribed under the Census of India 2011), the RBI, in 2012, decided to permit non-bank entities incorporated in India under the Companies Act 1956, to set up, own and operate ATMs in India.
Non-bank entities that intend setting up, owning and operating ATMs, are christened “White Label ATM Operators” (WLAO) and such ATMs are called “White Label ATMs” (WLAs).
As per RBI guidelines, cash management at the WLAs is the responsibility of the sponsor bank, who may if required, make necessary arrangements with other banks for servicing cash requirements at various places.
While the cash would be owned by the WLAO, the responsibility of ensuring the quality and genuineness of cash loaded at such WLAs would be that of the sponsor bank. At no point of time, the WLAO or his agents shall have access to the cash at the WLAs.
WLAOs provide banking services to the customers of banks in India, based on the cards (debit/credit/prepaid) issued by banks. The WLAOs role is confined to acquisition of transactions of all banks’ customers and hence they have established technical connectivity with the existing authorised shared ATM Network Operators / Card Payment Network Operators.
There are eight WLAOs in the country including Tata Communications Payment Solutions Ltd (9,060 ATMs), BTI Payments Pvt. Ltd. (4,096 ATMs), Hitachi Payment Servicess Pvt. Ltd. ( 652 ATMs) and Vakrangee Ltd. ( 328 ATMs). As at November-end 2016, WLAOs were collectively running 14,564 ATMs.