ATMs in India can be broadly divided into three types based on who owns the machine and who is responsible for its operations: Bank-Owned ATMs, Brown Label ATMs and White Label ATMs.
Bank-Owned ATMs
These ATMs are owned and operated by the bank itself. The bank takes care of everything, including cash management, network connectivity, security and maintenance.
Brown Label ATMs
Brown Label ATMs work on a shared responsibility model. The bank manages cash and network connectivity, while a non-bank service provider provides and maintains the ATM infrastructure.
White Label ATMs
White Label ATMs are owned and operated by non-bank entities. The service provider is responsible for almost all aspects of the ATM, including hardware, cash management, connectivity, security and maintenance.
What is an Interchange Fee?
The interchange fee is the charge paid by one bank to another when its customer uses the other bank’s ATM or PoS machine.
For example, when a customer of Bank A withdraws money from Bank B’s ATM, Bank A pays an interchange fee to Bank B. This fee helps the ATM-owning bank recover the cost of providing the service.
Customer Charges
Customers get a specified number of free ATM transactions every month. These include transactions at their own bank’s ATMs as well as a limited number of transactions at other banks’ ATMs.
Once the free transaction limit is exhausted, the bank can charge the customer for additional transactions.
RBI’s Revision of Interchange Fee
The RBI increased the interchange fee to reflect the rising cost of operating ATMs:
- Financial transactions: ₹15 → ₹17
- Non-financial transactions: ₹5 → ₹6
Non-financial transactions include balance enquiry, mini statement and PIN change.
Banks were also allowed to increase the customer charge for transactions beyond the free limit to ₹21 per transaction, effective from January 1, 2022.
At a Glance
| ATM Type | Who Owns It? | Who Handles Operations? |
| Bank-Owned | Bank | Bank |
| Brown Label | Service provider | Shared between bank and service provider |
| White Label | Non-bank entity | Non-bank entity |
FAQs
What are the main types of ATMs in India?
The three major types are Bank-Owned ATMs, Brown Label ATMs and White Label ATMs.
What is a Bank-Owned ATM?
A Bank-Owned ATM is owned, operated and maintained by the bank itself. The bank manages cash, connectivity, security and maintenance.
What is a Brown Label ATM?
A Brown Label ATM works through a shared arrangement. The bank manages cash and network connectivity, while a non-bank service provider provides and maintains the ATM infrastructure.
What is a White Label ATM?
A White Label ATM is owned and operated by a non-bank entity. The service provider generally handles the hardware, cash management, connectivity, security and maintenance.
What is an interchange fee?
An interchange fee is the charge paid by one bank to another when its customer uses the other bank’s ATM or PoS machine.
What is the difference between Brown Label and White Label ATMs?
In a Brown Label ATM, responsibilities are shared between the bank and the service provider. In a White Label ATM, the non-bank operator handles almost the entire ATM operation.
What are financial and non-financial ATM transactions?
Financial transactions include activities such as cash withdrawal, while non-financial transactions include services such as balance enquiry, mini statement and PIN change.
How much was the revised interchange fee?
The interchange fee was increased to ₹17 for financial transactions and ₹6 for non-financial transactions.
What is the customer charge after free ATM transactions?
Banks were permitted to charge up to ₹21 per transaction after the applicable free transaction limit was exhausted.
Ravi Raaz
Hassan Khan
Shadab Ali