With reference to White Label ATMs which of the following statements is are correct 1 NBFCs can appl...........

Economic Affairs Non Banking Financial Companies (NBFCs)

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With reference to White Label ATMs, which of the following statements is/are correct?

1. NBFCs can apply for a White Label ATM license.

2. White Label ATMs provides banking services based on debit cards only.

Select the correct answer using the code given below.

1 Only

2 Only

Both 1 and 2

Neither 1 nor 2

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Explanation:

White Label ATMs:
Statement 1 is correct: Automated Teller Machines (ATMs) set up, owned and operated by non-bank entities are called “White Label ATMs” (WLAs).
In June 2012, the RBI had issued policy guidelines permitting non-bank entities to set up and operate WLAs. Prior to this, only banks were permitted to set up and operate ATMs in the country
Statement 2 is incorrect: They provide the banking services to the customers of banks in India, based on the cards (debit/credit/prepaid) issued by banks. The primary objective of permitting nonbanks to operate WLAs, was to enhance the spread of ATMs in semi-urban and rural areas (mainly in tier III to VI areas), where bank-owned ATM penetration was not growing.