The Reserve Bank of India (RBI) is talking with several banks to install ‘rural ATMs’ that can dispense currency notes of low denominations.
RBI deputy governor R Gandhi said that the recent move is part of RBI’s efforts to bring 100% financial inclusion in the country through installation of cash dispensing machines in semi-urban and rural areas.
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"We have encouraged banks to find a solution for bringing in rural ATMs. Typically in city or urban centric ATMs, they will disburse high denomination notes (Rs 1,000 and Rs 500), whereas in rural areas, people will be requiring more of lesser denomination," he said in response to a query in Financial Sector Conclave.
To fulfill this requirement, banks will have to find an appropriate technology solution for a different type of ATM.
He also noted that the banking regulator is working on guidelines for giving licenses to differentiated banks and payment banks, which would be announced soon.
These banks are already well established in the developed countries, wherein differentiated banks take up specific banking operations including retail, rural and infrastructure banking, whereas payment banks deal with small deposits, provide transaction services and do not offer loans.
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