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White Label ATM - India ? What are WLAs ?


Contributed by  :

Rajesh Goyal,



 Background / White Label ATM in Canada and India :


White label ATMs are popular in Canada.   Since 2006, some banks have been pressing with RBI to introduce white label  ATMs in India too.   On 14th February, 2012, RBI has issued  DRAFT  guidelines and asked the comments of the bankers and public in this regard.   Thus, these guidelines are still not applicable but are likely to be soon approved.



Definition and Meaning of White Label  ATM -  India ?  or What is White Label ATM ? or What is WLA ? 


White Label ATM or White Label Automated Teller Machines or WLAs in India will be owned and operated by Non Bank entities.  From such White Label ATM customer from any bank will be able to withdraw money, but will need to pay a fee for the services.    These white label automated teller machines (ATMs) will not display logo of any particular bank and are likely to be located in non traditional places.



What is the purpose for introduction of White Label ATMs in India


In India only Banks are allowed to set up ATMs.  Although between 2008 - 2011, there has been 30% growth in number of ATMs and by the beginning of 2012, we have about 87,000 ATMs in India, yet the penetration of ATMs in Tier III and Tier IV cities has been low and downtime of such ATMs has been high.  Thus, RBI is feeling that there is a need to expand ATM network, which can be done by only with the help of  private operators.



Who will benefit from White Label ATMs :


The white label automated teller machines are likely to benefit customers as well as banks.   With the expansion of ATM network, customers will be able to withdraw funds at more locations which will be convenient and located near to their home or place of work.   Banks too support introduction of white label ATMs as such machines are likely to reduce pre-transaction cost for them and will be free from the problems relating to maintaining and running such a payment channel


What Problems are Likely to be Faced by Bankers and Customers :


Bankers are already sounding caution about the pitfalls of white label ATMs.  The first and foremost concern for customers will be the inconvenience they may feel in case of failed transactions on WLAs.  In such cases the dispute resolution mechanism will involve three entities — the WLA operator, the sponsor bank of the operator, and the customer's bank.  The WLA operators being non bank entities and running purely on profit basis may take longer time or avoid payments on account of failed transactions.   The second concern for customers will be the high cost they are likely to pay for use of such ATMs.



Meaning of While Label ATMs ; Who owns White Lable ATMs ?


News For White Label ATMs

In last few years in India has we have witnessed a lot of ‘brown label' ATMs, or outsourcing of ATM services by banks.  Thus, it was imperative that RBI will soon allow white label ATMs in India.   However, it was not being permitted as certain regulatory issues were involved.  White Lable ATMs have been in news in February 2012 as RBI issued the draft guidelines for the same.  RBI has issued the following draft guidelines on white lable Automated teller machines:-



(These draft guidelines are given here for those who wants to know in depth about the White Label ATMs and are of some use only till RBI comes out with final guidelines )



General Criteria for non-bank entities authorized by RBI to set up and operate WLAs

  1. The authorized non-bank entity (henceforth referred to as WLA Operator) would have the freedom to choose the location of the WLA. However, it will adhere to annual targets and the ratio of WLA between Tier I &II and Tier III-VI centres that may be stipulated by the Reserve Bank of India.
  2. Only the Cards issued by banks would be permitted to be used at the WLAs to start with.
  3. Acceptance of deposits at the WLA site into the account of the WLA operator or in any other account indicated by it shall not be permitted.
  4. The WLA Operator will be the "acquirer" for all transactions at the WLA and earn his fee accordingly.
  5. The WLA Operator would be permitted to earn extra revenue through advertisement and by offering value added services. The advertisements placed on such ATMs would be subject to Advertising Standards Council of India (ASCI) codes and other regulations.
  6. Being non-bank owned ATMs, the guidelines on five free transactions in a month for using other bank ATMs would not be applicable for transactions effected on the WLAs. The charges for the transactions should be displayed on the screen before the customer initiates the transaction.
  7. The WLA Operator would not be entitled to any other fee from issuer bank other than the "Interchange" fee payable to "acquirer" bank under the present bank owned ATM scenario. The WLA Operator shall also not be permitted to charge any fee from the customers for the use of the ATM resources.
  8. Regulatory guidelines relating to compensation for failed ATM transactions would apply to transactions at WLAs.
  9. General guidelines governing the operations of the bank operated ATMs would apply mutatis mutandis to WLAs.

Roles and Responsibilities of various stakeholders in the WLA model

A. WLA Operator

  1. Entities shall commence setting up and operating WLAs only after it has been authorized to do so by the RBI under the Payment and Settlement Systems Act, 2007.
  2. WLA Operator shall declare one “Sponsor Bank” , who will serve as the Settlement Bank for the settlement of all the service transactions at the WLAs. The Sponsor Bank should be a member of one of the ATM networks authorized by the RBI and also be a member of the RTGS.
  3. Cash Management of the WLAs shall be entrusted to the Sponsor Bank, who may have necessary arrangements in this regard with other banks for servicing cash requirements at various places. At no point of time, the WLA Operator or his agents shall have access to the cash at the WLAs.
  4. Settlement of all the transactions at the ATMs shall be done only in the books of the Sponsor Bank through the ATM Network with whom the WLA Operator has established connectivity.
  5. Maintenance and servicing of the WLAs shall be the sole responsibility of the WLA Operator.

B. Sponsor Bank

(I) Cash Management

  1. Sponsor Bank would be responsible for cash management at the WLAs and should ensure that the WLAs are adequately stocked with cash and only good quality notes are dispensed to the users of the WLAs. As regards availability of funds for cash loading, a suitable arrangement would be entered into between the WLA and the Sponsor Bank
  2. The ownership of the cash to be loaded into such WLAs Cash Management will also include reconciliation of cash at the WLAs and appropriate accounting of excess cash, if any, on account of partial or no disbursal.
  3. For the purpose of cash management, the Sponsor Bank may enter into tie-ups  with other banks for loading and reconciliation of cash  at various WLAs at locations where it has no presence. In such case, the cash managing bank will have the same responsibilities as indicated at (a) above.

(II) Customer Grievance Redressal

  1. While the primary responsibility to redress grievance of customers relating to failed ATM transactions will vest with the Issuing Bank, the Sponsor Bank will provide necessary support in this regard, including making available relevant records and information, to the Issuing Bank.  For this purpose, the Sponsor Bank should have necessary arrangement with the WLA Operator.
  2. The extant directives of the RBI on the time-lines for resolution of complaints of failed ATM transactions would also apply to transactions at the WLAs. For delay in resolution of such complaints attributable to the Sponsor Bank or the WLA Operator resulting in payment of penalty to the customer by the Issuing Bank in terms of the directives of RBI, the Issuing Bank shall be compensated by the Sponsor Bank.  The Sponsor Bank may have appropriate agreements with the WLA Operator for recovery of such amounts.

C. ATM Network Operators

  1. Network Operators will offer direct connectivity to the WLA Operator to facilitate transactions at the WLA and the settlement thereof after seeking requisite approvals from the RBI.
  2. They bring the WLA Operator under the ambit of the Network’s Operating Guidelines  and the Dispute Resolution Mechanism put in place in accordance with the extant directives of the Reserve Bank of India.

D. General

  1. The ATM Network Operator, the WLA Operator and the Sponsor Bank shall enter into a Tri-partite Service Level Agreements (SLA) to address issues relating to inter-bank settlement of the transactions at the WLAs and settlement of customer complaints relating to failed ATM transactions. The SLAs should clearly spell out the role of each party.
  2. The relevant provisions of all guidelines/directives/instructions issued by various departments of the Reserve Bank of India viz. Department of Payment & Settlement Systems (DPSS), Department of Banking Operations and Development (DBOD) and Customer Services Department (CSD) with reference to the services, operations, security, etc. at the bank ATMs would also apply to the WLAs.




Other Links :

What is Brown Label ATM