Source: Economic Times
The government is likely to allow 100 per cent foreign direct investment (FDI) in white labelled ATM operations under automatic route to promote financial inclusion.
A draft Cabinet note has already been circulated by the Commerce and Industry Ministry for inter-ministerial consultation, sources told PTI.
The move is aimed at increasing the number of Automated Teller Machines (ATMs) in smaller cities and towns.
As per the current FDI policy, foreign investment is allowed under the government approval route.
According to RBI guidelines, white labelled ATMs to be set up by non-bank entities would provide banking services to customers, based on cards (debit/credit/prepaid) issued by banks.
White labelled ATMs are set up by private non-bank companies that own and operate their own brand of ATMs.
As per the guidelines, the non-bank entities must have net worth of at least Rs 100 crore.
According to sources companies including Srei Infrastructure FinanceBSE 1.84 % Ltd and Muthoot FinanceBSE -0.17 % be benefited from the move.
Currently, there are over 1.82 lakh ATMs operated by 54 public, private and foreign banks in the country.
The government has already relaxed the FDI policy in sectors including defence, railways and construction to boost foreign investment in the country.
In 2014-15, FDI into the country increased by 27 per cent to $30.93 billion.