The Hindu Business Line : ‘No prior approval needed to set up offsite ATMs’

Mumbai, April 21 In a move that would allow banks to expand their ATM networks more easily, the Reserve Bank of India has done away with the requirement of prior regulatory approval for setting up offsite ATMs. These are standalone ATMs outside branch premises.

RBI had earlier dispensed with the requirement of obtaining regulator permission for onsite ATMs (ATMs at branch premises). Currently, banks approach RBI for approval for setting up offsite ATMs. After making a medium-term plan about their requirements of branches and ATMs, banks approach the central bank for permission and proceed with setting them up after receiving the approval.

In its annual Policy Statement 2009-10, the RBI said, “It is proposed to allow scheduled commercial banks to set up offsite ATMs without prior approval subject to reporting.”

With respect to branch authorisation policy, the RBI said, “It is proposed to constitute a group to review the existing framework with a view to providing greater flexibility, enhanced penetration and competitive efficiency with financial stability.”

According to Mr Abizer Diwanji, National Industry Director, Financial Services, KPMG, the move to liberalise ATM expansion is a good decision as it will enable more banks to offer more cost-efficient delivery of services. A bank with limited branches can expand its reach by setting up more ATMs.

Mr M.V. Nair, Chairman and Managing Director, Union Bank of India, said the RBI move will create more reach for banks.

As part of its measures to make ATM usage more customer-friendly, the RBI has done away with the charges on using ATMs of other banks from April 1. The RBI had also asked banks to provide ramps at ATMs and bank branches for easy access by the differently abled, earlier this month.

Ms Chanda Kochhar, Joint Managing Director, ICICI Bank, said the measure to allow banks to set up offsite ATMs without prior approval and a review of the existing branch licensing policy for further liberalisation would promote financial deepening in the country and enable banks to extend their services to a wider customer base.

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