an in in ndia      12.35
        (xii) Other conditions for the bank:                the ‘payment banks’ suggested by an RBI panel
              (a) To open at least 25 per cent of its       (headed by Nachiket Mor) on financial inclusion,
                   branches in un-banked rural centres      to widen the spread of payment services and deposit
                   (with population of upto 9,999 as per    products to small businesses and low-income
                   the latest census).                      households.
              (b) To comply with the priority sector
                   lending targets applicable to the           laBels oF atM
                   existing domestic banks.
                                                            The automated teller machine (ATM) enetered
              (c) Banks promoted by groups having 40        India by late 1980s and have evolved into three of
                   per cent or more assets/income from      its types by now—
                   non-financial business will require
                                                                  (i) Bank’s own ATMs: These are owned and
                   RBI’s prior approval for raising paid-
                                                                      operated by the concerned bank and carry
                   up voting equity capital beyond Rs.
                                                                      the bank’s ‘logo’. They are the costliest
                   10 billion.
                                                                      way to provide such service to bank’s
              (d) Any non-compliance of terms and
                                                                      customers.
                   conditions will attract penal measures
                   including cancellation of licence of          (ii) Brown Label ATMs (BLAs): These are
                   the bank.                                          owned by third party (a non-banking
                                                                      firm). The concerned banks only handle
     Two new banks get licence: The RBI by early                      part of the process that is ‘cash handling’
     April, 2014 granted ‘in-principle’ approval to two               and ‘back-end server’ connectivity. They
     applicants, IDFC Limited and Bandhan Financial
                                                                      carry ‘logo’ of the bank which outsources
     Services Private Limited, to set up banks—‘in-
                                                                      their service.
     principle’ approval granted will be valid for 18
     months during which the applicants have to                 (iii) White Label ATMs (WLAs): These are
     comply with the requirements and fulfil other                    ‘owned’ and ‘operated’ by a third party
     conditions. Both are leading non-banking finance                 (a non-banking firm). They do not bear
     companies, while IDFC deals in infrastructure                    ‘logo’ of the banks they serve (that is
     finance, Bandhan is in microfinance business.                    why such a name). In place, they carry
     A High Level Advisory Committee headed by                        logo of the firm which own them. They
     former RBI Governor Bimal Jalan recommended                      serve customers of all banks and are
     these two applicants out of a list of 25 applications.           interconnected with the entire ATM
     The case of India post will be decided by the RBI                network in the country. The role of the
     in consultation with the Government of India.                    concerned bank is only limited to provide
     The RBI also announced to work on giving                         account information and back-end money
     licences more regularly, that is virtually ‘on-                  transfers to the third parties managing
     tap’. As per the RBI, those applicants who                       these ATM machines. These entities
     have been denied licences can apply for the                      have a mandate to deploy 67 per cent
     ‘differentiated licences’ (once RBI invites                      of ATMs in rural locations (Tier III-VI)
     applications for it)—some of them may be better                  and 33 per cent in urban locations (Tier I
     off applying for a differentiated licence rather                 and II cities). The Tata Communications
     than for a full licence. The so-called differentiated            Payment Solutions became the first such
     banks will be specialised institutions such as                   firm to get permission of the RBI (by