Muthoot Fin gets shareholder nod for white label ATMs

Written by RajeshRavi | Kochi | Updated: Dec 7 2012, 16:03pm hrs
Gold loan NBFC Muthoot Finance has received shareholder approval to set up white label automated teller machines (ATMs) across the country.

RBI has permitted non-banking entities to set up and run ATMs known as white label ATMs due to the lower presence of banks and ATMs in tier-II and tier-III cities. In terms of existing regulations, only banks are permitted by RBI to set ATMs as extended delivery channels.

Muthoot Finance had approached RBI to set up 3,000 white-label ATMs in a span of three years and would have to establish 1,000 ATMs in the first year of operation, Bijimon KR, chief general manager of the company, told FE. The Kerala-based company is the largest gold financing company in India in terms of loan portfolio with 3,853 branches across the nation.

RBI came out with guidelines for white label ATMs in June 2012. Interested companies would have to obtain authorisation under the Payment and Settlement Systems (PSS) Act 2007. Non-banking entities must have a minimum net worth of R100 crore as per the latest financial year's audited balance sheet to be eligible for setting up white label ATMs.

Regarding the location of the proposed ATMs, he said RBI has fixed stipulations that a larger proportion of the machines would have to be located in smaller towns. The company could, in the future, look at co-branded debit cards after negotiations with individual banks.

The company feels that setting up ATMs across all branches and in other business centres across the country would benefit not only its customers, but also help increase its visibility and customer base in long run.