In order to increase the penetration of ATMs across the country and enable financial inclusion, the union cabinet chaired by Prime Minister Narendra Modi on Wednesday approved 100 percent FDI under automatic route for white label ATMs, or machines owned and operated by non-banking organisations.
The 100 percent FDI under the automatic route is subject to the condition that any non-bank entity planning to set up white label ATM should have a minimum net worth of Rs.100 crore.
The Rs.100 crore net worth should be maintained at all times.
In the case of entities operating in any other 18 non-banking finance companies (NBFC) activities, then foreign investment in setting up the white label ATMs should comply with the sectoral minimum capitalisation norms.
Currently foreign investment in white label ATM companies are allowed under approval route which took time for issuing necessary approvals.
According to the government, the decision to ease the FDI norms is mainly to increase the financial inclusion in the country with the deepening of ATM networks across the country.
The government is leveraging the ATM network to deliver various banking services.
While there has been a growth of ATM networks owned by banks, they are set up in tier I and II cities.
(IANS)