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| Banks can set up offsite ATMs sans approval | |
| BS Reporter / Mumbai April 22, 2009, 0:09 IST | |
The Reserve Bank of India (RBI) today allowed all scheduled commercial banks to set up offsite ATMs without prior approval of the regulator.
According to the current branch authorisation policy, banks need to have a medium-term plan in respect of branch (including ATM) expansion. Lenders have to apply for a branch licence in the beginning of the financial year and secure approval for new branches depending on their assessment of the annual plan. This has been modified.
Pradeep Sen, Managing Director, NCR Corporation India, said, “This gives banks the flexibility to relocate ATMs based on transaction volumes and need. It is a great step in improving ATM channel penetration and rapid expansion. ATMs would be in great demand as customers would like to avoid queues in the bank and with the recent announcement of no charge for using other ATMs, customers will be motivated to use it more often.”
In the current scenario, small and mid-sized banks are going slow on ATM expansions. The revenue from the interchange fee is seen not to be attractive starting April 1, 2009, as against the cost of setting up the branches.
The central bank, in its annual policy document, said that the enactment of the Payment and Settlement Systems Act, 2007, had brought the systems involved in the issuance of prepaid payment instruments under its regulatory jurisdiction.
Pre-paid payment instruments such as gift vouchers and telephone calling cards facilitate the purchase of goods and services against the value stored on them. The value stored on these instruments represents the value paid for by the holder by any means.
The central bank had earlier placed the draft guidelines for issuance and operation of these instruments in public domain for wider dissemination and feedback.
RBI has allowed banks, which comply with certain eligibility criteria, to issue all categories of prepaid payment instruments and the eligible non-bank entities, including NBFCs, to issue semi-closed instruments.
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