Brown label atm

ATM system in Indian is set to flourish at a quick speed over the next few years thanks to the 'brown label' idea, which has taken the creativity of huge financial institutions as it allows them set up many devices in several weeks. The design is anticipated to force the variety of devices from 75,000 to 1.5 lakh by 2015.

'Brown label' is used to explain an ATM where components and the rental is possessed by something agency, but money control and connection to financial systems is offered by an attract bank whose product is used on the ATM. The `brown label ATM' has come up rather between bank-owned ATMs and 'white label' ATMs. Some in the past, financial institution technological innovation suppliers had suggested an idea of 'white label' ATMs where companies set up their own devices from which any financial institution client could manage for a fee. RBI had converted down this offer as it did not want to allow non-banks into a financial action Now, the 'brown label ATM' idea is being implemented by bigger financial institutions, like Axis and ICICI Bank, and little creditors like Dhanlaxmi and Ratnakar Bank. Some state-owned financial institutions like Organization Bank are also using this path to flourish their system, while others like Main Bank and Financial institution of Baroda are also looking at improving their current ATMs using the brownish brand idea Besides speed of deployment, there are two other advantages of the brown label concept.

First, the banks need not lock their funds in a fast depreciating asset since the capital investment is undertaken by the vendor. Second, since the vendor gets a fee for every transaction from the bank which has issued the card, there is an incentive to ensure efficiency in terms of usage. Under maintenance contracts, vendors would put stringent conditions requiring the service provider to ensure ATM up time.

As a result, banks that are net issuers of cards are finding that they are losing money if too many of their customers go to other machines. But some of the smaller banks who do not have a large customer base across the country are finding it more economical to pay other banks per transaction rather than invest in machines on their own.