December 30, 2016
The Chairman and Managing Director / Chief Executive Officers
All Scheduled Commercial Banks including RRBs /
Urban Co-operative Banks / State Co-operative Banks /
District Central Co-operative Banks /
Authorised ATM Network Operators /Card Payment Network Operators/
White Label ATM Operators
Dear Madam/ Sir,
White Label ATM Operators (WLAOs) – Sourcing of cash from retail outlets
Following the withdrawal of legal tender characteristics of existing Rs. 500/- and Rs. 1000/- Bank Notes (Specified Bank Notes – SBN) vide Circular No.DCM (Plg) No.1226/10.27.00/2016-17 dated November 08, 2016, it has been brought to our notice that White Label ATM Operators (WLAOs) are having difficulties in sourcing cash from their sponsor bank(s).
2. In order to facilitate cash availability for WLAOs, it has been decided to allow them to source cash from retail outlets subject to following conditions:
a. WLAOs shall be solely responsible for the quality and genuineness of currency notes dispensed through their ATMs. Only ATM fit notes shall be used for this purpose,
b. WLAOs may enter into bilateral arrangement with retail outlets from where they desire to source cash based on their Board approved policy,
c. Liability and disputes, if any, arising out of such arrangements shall be the responsibility of WLAOs,
d. WLAOs shall be responsible for resolving customer disputes and shall make good any loss caused to a customer including those on account of fake notes,
e. 60% of the cash sourced using such arrangement(s) shall be dispensed through WLAs located in rural and semi-urban areas.
f. All other extant instructions pertaining to WLAOs remain unchanged.
3. The above arrangement shall come into effect from the date of this circular and the modalities/ continuance shall be subject to review.
4. The directive is issued under Section 10(2) read with Section 18 of Payment and Settlement Systems Act 2007 (Act 51 of 2007).