Following the tightening of norms for gold loan providers by the banking regulator, Reserve Bank of India, gold loan company Muthoot Finance has planned to venture into white label ATM space.
The company has decided to diversify its business and leverage its 3853 branches strong network for the purpose of entering the new business segment. It has presence across the country in 21 states and four Union Territories. At present, the non banking finance company is engaged in the business of providing loans against the security of gold jewelry.
The board of Muthoot Finance feels that opening WLAs in all its branches and other business centers will help it to increase its visibility and customer share. Many experts are of the view that the company's foray into white label ATM space is to counter the effects of slowdown in its primary business due to the new norms laid down by the central bank. Apart from this, the move may also help the company to better manage its cash resources.
It is to be noted that to improve the penetration of ATMs across the country, RBI has recently decided to allow non banking institutions also to own, set up and perform ATM operations. These ATMs are to be called ‘White Label ATMs' and can be used by customers of all banks. By the end of this fiscal, about 80, 000 WLAs will be set up across the country.