Friday, February 13, 2015

Automated Teller Machine (ATM)

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Automated Teller Machine (ATM) is a computerized machine (specialized computer) that provides the customers of banks the facility to access their accounts for dispensing cash and to carry out other financial (e.g., remittances) as well as non-financial (e.g., balance check) transactions, without visiting the bank branch.

Services / Facilities provided by ATMs -
  • Cash Withdrawal
  • Account Information
  • Cash Deposit (not permitted at WLAs)
  • Regular Bill Payment
  • Purchase of Vouchers
  • PIN change
  • Mini / Short Statement
  • Cheque book request
  • Loan Account Enquiry, etc.

ATMs can be classified depending on the owner and operator -

1.  Bank-owned ATM 
These are owned and operated by individual banks.

2.  White Label ATM (WLA)
These type of ATMs are set up, owned and operated by non-bank entities (e.g., NBFCs). WLAs are authorized under Payments and Settlement Systems Act, 2007 by RBI. These have following features -
  • Logo displayed on the machine or premises will be of WLA Operator's. However, customers can use these ATMs, as of using other bank ATMs (bank other than card issuing bank)
  • Cash deposit is not permitted in the WLA machine (as of now).
3.  Brown Label ATM (BLA)
These type of ATMs are set up and owned by a Service provider, but cash management (operation) and connectivity is provided by a sponsor bank (brand of this bank is used on the ATM). 

By using BLAs, banks have the opportunity to cut the huge cost of setting up of an ATM (bank-owned ATM)

Note -
ATMs - bank (owner), bank (operator)
WLAs - non-bank (owner), non-bank (operator)
BLAs - non-bank (owner), bank (operator)

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