Financial Inclusion in India: One of the Crucial Enablers is White Label ATMs

Navroze Dastur, Managing Director- NCR India 2

Financial inclusion is an issue being dealt with in India for a seemingly long period of time. Although several steps have been introduced to help make India a financially inclusive nation, a lot more needs to be undertaken on this front. The new government initiative of ‘Jan Dhan Yojana’ is one of the steps in that direction, its objective is of driving sustainable and equitable growth through financial inclusion and bring every Indian into the banking net, including the poorest of the poor households.  While opening bank accounts is one step towards taking the big leap, implementing access to financial transactions will be the next big challenge for the government & banks as the last mile delivery of that service and the cost to provide the same will determine the success of any such project.  The access to financial inclusion promotes economic growth and helps reduces poverty and inequality.

The financial services infrastructure has evolved in multiple ways with rural customer having access to banking services through business correspondents (BCs), opening of ultra-small banks, points of sale terminals (PoS), mobile ATMs, door-step bankers, etc. White Label ATMs (WLAs) is another initiative by the RBI that sheds light on propelling the financial inclusion drive in rural areas.

One cannot ignore the fact that ATMs will continue to be the mainstay to dispense banking service to the unbanked either through bank owned networks or WLA networks.  ATM’s are capable of reaching out to audiences in unbanked areas and make payments accessible to card holders in those areas. The WLAs can serve as a one stop shop for customer needs and requirements owing to the potential that they offer a host of value-added banking services. Although WLA’s have their own share of challenges, banks are happy to let them deploy in the rural areas as it significantly lowers the capital requirements and transaction processing costs for them and they can foster greater financial inclusion.  With more ATMs prominently located at several places, banking customers in Tier III or VI markets would be far more likely to use permanent, convenient access points such as ATMs to conduct banking transactions, rather than having to wait for agents or BC to visit their villages. This, in itself, will inculcate banking habits among the rural population thereby driving financial inclusion.

According to the RBR report, the Indian ATM market is expected to reach a mark of 440,000 ATMs by 2018. WLA’s will contribute a big share in this growth with companies like TCPS, Prizm Payments, Muthoot Finance, Vakrangee Ltd, BTI, etc. among others making this model viable in the country.

While talking about WLA’s, it is imperative to focus on some of the challenges that they face. The main one being infrastructure whether it be in the form of electricity, communications, availability of good machine fit currency, stability in the interbank rates etc. With more accounts being opened and innovative technologies being introduced in rural areas, it is equally important to have access to utilities like electricity and connectivity to run the back-end technology securely and smoothly to provide uninterrupted services. Most of the banks or WLA deployers will think extensively before setting up a branch or deploying an ATM because the investment they make should ultimately yield profits. In this scenario, different partnership models can be leveraged.  Through such partnerships, participants can share infrastructure-development costs and combine their strengths to improve consumer access to services in remote areas.

Tackling India’s financial-inclusion challenge will require multiple interventions. Most prominent amongst those will be easing regulatory norms for bank customer acquisition, improving financial literacy, designing suitable banking services to meet different consumer needs and expanding the penetration of banking infrastructure into rural areas to make access easier and more affordable for account holders. If these areas are looked at, India will not be far from being called a financially inclusive nation.


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