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What are Brown Label ATMs




Description and Meaning of Brown Label ATMs :



'Brown label' ATM are those Automated Teller Machines where hardware and the lease of the ATM machine is owned by a service provider, but cash management and connectivity to banking networks is provided by a sponsor bank whose brand is used on the ATM.

The `brown label' has come up as an alternative between bank-owned ATMs and 'white label' ATMs.  As in India white label ATMs were not allowed by RBI (in February, 2012, RBI has issued the draft guidelines for introduction of white ATMs, but final approval has yet to come.), the concept of Brown Label ATMs started picking up.  



What is the Status of Brown label ATMs in India :


In view of the high cost of ATM machines and RBI's guidelines for expansion of ATMs, the concept of Brown Label ATM network is likely  to expand at a brisk pace in next few years.    In the recent years, there is a visible shift in the way banks look at the ATM business.  From the earlier model where banks used to buy outright the ATM machines and bear the cost of service, they are now preferring brown label ATMS i.e. where the machine and service is outsourced.   There are indications that as many as 50% may soon be under this category.

However, after approval of white label ATMs, the bankers will review the expansion model for their ATMs.







In September, 2011, it was reported that Hughes Communications India Ltd will set up 5000 Brown Label ATMs in India.  In the press release Hughes claimed that they are the preferred service providers to the leading brown label ATM vendors in India.   All Major ATM vendors in the country like FIS, TSI, TCBIL, Diebold, AGS, Prizm, FSS and Euronet use Hughes VSAT terminals to set up ATMs.  Indian banking sector has metamorphosed into a technology driven domain and this resulted in the growth and evangelism of "Brown Label" ATMs.   Under Brown label ATM, the hardware and lease is under the ownership of the service provider, but connectivity and cash handling and management is the responsibility of the sponsor bank.  The best part is that the ATM is under the brand and logo of the sponsor bank.  Thus this model is about a shared network that results in tremendously cutting costs within banks.




Contributed by  :

Rajesh Goyal,