Union Cabinet approved 100 percent FDI in white label ATMs through automatic route

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Union Cabinet approved 100 percent FDI in white label ATMs through automatic route

Who: 100 percent FDI in white label ATMs through automatic route
What: Approved by the Union Cabinet
When: 9 September 2015
Why: To expand financial services to Tier III to Tier VI cities

The Union Cabinet on 9 September 2015 approved 100 percent Foreign Direct Investment (FDI) in white label Automated Teller Machines (WLAs). White label ATMs are those that are being set up by non-bank entities.

In contrast to the earlier norm of going through the approval route, this decision by the cabinet allows foreign investments through the automatic route.

However, any non-bank entity intending to set up WLAs should have a minimum net worth of 100 crore rupees as per the latest financial year’s audited balance sheet, which is to be maintained at all times.

The change in the policy guidelines is primarily aimed at extending the financial inclusion principal even to the Tier III to VI cities across the country.

The extended reach of ATMs will allow beneficiaries of the Pradhan  Mantri Jan  Dhan  Yojana to avail a wide variety of banking services like accessing their accounts for dispensing cash and non-financial services without the need for actually visiting their bank branch.