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