Home » Federal Bank to set up 15K ATMs, hires Tata firm

Federal Bank to set up 15K ATMs, hires Tata firm

Federal Bank to set up 15K ATMs, hires Tata firm

To install 15,000 White-Label ATMs (WLAs) across India, private sector lender Federal Bank has tied up with Tata Communications, the Bank said on June 24. White-Label ATMs are to be set up by non-banking entities on behalf of ‘sponsor banks’ but they would not carry the brand label of any bank, and would be accessible to card-holders of all the banks for a fee.

The Reserve Bank of India’s (RBI) objective in allowing WLAs is to increase the spread of ATMs in semi-urban and rural areas where bank-owned ATM penetration is low.

Federal Bank said that this is the first such tie-up between a lender acting as a sponsor bank and a private company after RBI announced its white label automated teller machines norms. Under the arrangement, 5,000 ATMs will be installed across the country every year for a period of three years, taking the total to 15,000 ATMs, Federal Bank said.

As per the RBI’s policy the ATMs are to be installed under the 2:1 formula; two ATMs will have to be opened in the tier III to VI centres, to open one in small towns.

Ten per cent of the ATMs installed in the tier III to VI centre will be in tier V and VI centres. As the sponsor bank, Federal Bank will take care of cash operations, dispute resolution and regulatory reporting aspects, it added. The Reserve Bank has granted Tata Communications Payment Solutions (TCPS), a subsidiary of Tata Communications, license to set up and operate white-label ATMs in the country.

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