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Part 19

The document outlines various types of ATMs in India, including online, offline, networked, white label, and brown label ATMs. It details operational guidelines such as free transaction limits, complaint lodging procedures, and penalties for non-replenishment of cash. Additionally, it emphasizes security measures like PIN validation for transactions and the resolution timeline for wrongful debit complaints.

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Sridhar Govindan
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16 views14 pages

Part 19

The document outlines various types of ATMs in India, including online, offline, networked, white label, and brown label ATMs. It details operational guidelines such as free transaction limits, complaint lodging procedures, and penalties for non-replenishment of cash. Additionally, it emphasizes security measures like PIN validation for transactions and the resolution timeline for wrongful debit complaints.

Uploaded by

Sridhar Govindan
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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JAIIB

50 Days – 50 Marks
ATM Operations
ATM Models in India
• Online ATMs: These ATMs are connected to a bank’s database and provide real-time
access to customers' accounts. Transactions are processed online, and the ATM switch
monitors daily withdrawal limits set by the bank for each account.
• Offline ATMs: These ATMs are not connected to a bank’s database. Transactions are
allowed up to a pre-fixed limit regardless of the actual balance in the customer's
account. This mode is typically used in areas with connectivity issues.
• Networked ATMs: ATMs that are connected to a broader ATM network, allowing
customers to use their cards at any ATM within the network. This enables "anywhere
anytime" banking. In India, the majority of ATMs are networked through the National
Financial Switch (NFS) operated by the NPCI (National Payments Corporation of India).
Types of ATM
• White Label ATMs (WLAs): These ATMs are set up, owned,
and operated by non-bank entities. The entities provide
ATM services to the customers of all banks, but they do not
carry any branding of a particular bank.
• Brown Label ATMs: These ATMs are owned by a service
provider but operated by a bank. The bank’s branding is
present on these ATMs, but the infrastructure and
management are provided by the service provider.
ATM Operations
• Free Transactions at ATMs:
o Customers are eligible for five free transactions (both financial and non-
financial) per month from their own bank ATMs.
o From other bank ATMs, they can avail of three free transactions in
metro centers and five in non-metro centers.
• Transactions at ATM - Pin Validation for Every Successive Transaction:
o To prevent fraud and misuse, it is recommended that pin validation be
required for every transaction, including balance inquiries.
o A timeout for sessions should be enabled for all screens and stages.
ATM Operations
• Lodging of ATM-related Complaints:
o Banks must display the telephone numbers of help desks/contact persons at
all ATM kiosks to facilitate the lodging of complaints.
o A uniform template prescribed by RBI should be used for lodging
complaints.
• Measures to Enhance Efficiency in ATM Operations:
o Several steps are recommended, such as displaying messages of non-
availability of cash, displaying ATM-ID, and having sufficient toll-free
numbers for reporting lost cards.
o Customers should be registered for alerts, and failed transaction complaints
must be lodged with the card issuing bank.
ATM Operations
• Reconciliation of Transactions at ATM Failures -
Time Limit:
o RBI advises banks to resolve wrongful debit
complaints within T+5 working days of receiving
the customer complaint.
o If delayed, the issuing bank must compensate
the customer ₹100 per day of delay.
ATM Operations
• Scheme of Penalty for Non-replenishment of ATMs:
Banks/WLAOs must ensure the timely replenishment of cash in
ATMs. A penalty of ₹10,000 per ATM is imposed for cash-out
situations exceeding ten hours in a month.
• Disputes Regarding ATM Failed Transactions: Disputes should be
settled between the issuing bank and the acquiring bank via the
ATM system provider. Bilateral settlement outside this
mechanism is not permitted.
Concept Check
Q1. How many free transactions are customers allowed per month at their own bank
ATMs, including both financial and non-financial transactions?
A. Three transactions
B. Five transactions
C. Seven transactions
D. Unlimited transactions
Answer: Option B
Concept Check
Q2. In metro centers, how many free transactions can a customer make at other bank
ATMs per month?
A. Two transactions
B. Five transactions
C. Three transactions
D. Seven transactions

Answer: Option C
Concept Check
Q3. What is required for each transaction, including balance inquiries, to enhance the
security of ATM transactions?
A. No PIN validation required
B. Fingerprint verification
C. PIN validation for every transaction
D. Password validation
Answer: Option C
Concept Check
Q4. What penalty is imposed if an ATM remains out of cash for more than ten hours in a
month?
A. ₹5,000 per ATM
B. ₹20,000 per ATM
C. ₹10,000 per ATM
D. ₹15,000 per ATM
Answer: Option C
Concept Check
Q5. What is a primary benefit of Networked ATMs?
A. They only allow withdrawals from the issuing bank’s ATMs.
B. They do not require a PIN for transactions.
C. They allow cardholders to use their cards at any ATM within the network, enabling
"anywhere anytime" banking.
D. They are restricted to a single geographic location.

Answer: Option C

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