Banks without ATMs can now tie up with bigger banks

Views: 97

ATMThe Reserve Bank of India (RBI) has permitted banks without ATM network to issue debit cards in tie-up with a bank that has its own network.

Co-operative banks have also been allowed to issue debit cards with a bigger bank as a sponsor.

RBI has also mandated guidelines to become sub-member of the National Financial Switch (NFS) for carrying out such transactions.

Banks are required to fulfill the following criteria for becoming a sub-member of NFS network – Core Banking Solution (CBS) fully implemented:

*Licence for conducting banking business.
* from sponsor bank (a bank having ATM network connectivity).
*Connectivity with National Payment Corporation of India (NPCI).

“As a precursor to moving towards a less-cash economy, it is necessary to inculcate the habit of using electronic payment channels among bank customers. With this in view, RBI has decided to permit co-operative banks which are CBS enabled, to issue ATM cards/ATM-cum-debit cards in tie-up with a sponsor bank,” the central bank said in a notification.

Such banks, being sub-members of NFS, are required to fulfill the risk management requirements prescribed by the sponsor bank and meet expenses devolving on them under the agreement with the sponsor bank.

Click to comment

Leave a Reply

Your email address will not be published. Required fields are marked *

Latest News

To Top