The Union Cabinet chaired by the Prime Minister Shri Narendra Modi, has given its approval to permit Foreign Direct Investment (FDI), up to 100 percent, under the automatic route, in the activity of White Label ATM (WLA) Operations subject  to the following conditions:

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

ii. In case the entity is also engaged in any other 18 Non-Banking Finance Companies (NBFC) activities, then the foreign investment in the company setting up WLA, shall also have to comply with minimum capitalization norms for foreign investments in NBFC activities, as provided in Para 6.2.18.8.2 of the Consolidated FDI Policy Circular 2015.

iii.  FDI in the WLAO will be subject to specific criteria and guidelines issued by RBI vide Circular No. DPSS.CO.PD. No. 2298/02.10.002/2011-2012, as amended from time to time.

This decision, will ease and expedite foreign investment inflows in the activity and thus give a fillip to the Government's effort to promote financial inclusion in the country, including the Pradhan  Mantri Jan  Dhan  Yojana.   It is expected that consequent to ease of investing in India, adequate investments would be available in WLA Operations. This would help in the government's objective of enhancing ATM networks in semi-urban and rural areas (mainly in Tier III to VI areas).

Participation of foreign investors in the sector will contribute to furthering financial inclusion.

Background:

One of the main objectives of the Government is to achieve financial inclusion in the country. In this regard, ATMs have been leveraged for delivery of a wide variety of banking services to customers such as the facility of accessing their accounts for dispensing cash and to carry out other financial and non-financial transactions without the need for actually visiting their bank branch. While, there has been year-on-year growth in the number of ATMs, yet their deployment has been predominantly in Tier I & II centres. To expand the reach of ATMs in Tier III to VI centres, non-banks entities were also allowed to set up ATMs, and such ATMs are known as White Label ATMs.

Till date foreign investment in White Label ATM Operations (WLAO), was being allowed only through government approval route. This required some processing time and projects were consequently delayed, dissuading investors from investing in such critical areas.

FDI in White Label ATM operations permits full foreign ownership under automatic route, subject to net worth and RBI rules. Permit 100 percent FDI under the automatic route in White Label ATM operations subject to a minimum net worth of Rs. 100 crore for non-bank operators, adherence to NBFC capitalisation norms if engaged in NBFC activities, and compliance with RBI guidelines and sectoral criteria governing WLA operations.