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Zee promoter Subhash Chandra bets big on white label ATMs

Zee Network promoter Subhash Chandra is betting big on the so-called ‘white label ATM’ business, with plans to roll out 50,000 of them nationwide at a time when new players in this category are struggling to both scale up and stabilise operations.

The investment for the Automated Teller Machine, or ATM, project is pegged at about Rs 2,500 crore and will bring in an international ATM manufacturer as a strategic partner with equity stake.

Non-bank entities that intend to set up, own and operate ATMs, are known as White Label ATM Operators (WLAO); ATMs operating by such non-banking firms are known as white label ATMs. Reserve Bank of India issued guidelines in June 2012 to set up ATMs. In India, white label ATMS are run by only a handful of companies, such as Muthoot Finance and the Tata Group. 

The financing for the project, however, remains unclear. 

“It is too early to comment on the exact means of financing but we are working on novel business models,” said Amitabh Chaturvedi, Managing Director of Essel Finance, which will drive the white label ATM business. “We will most likely seek private equity investment for this project and expect to start roll out in the next six months.” 

However, the company will not partner with ATM manufacturers such as NCR and Diabold, which already have a presence in India, and has instead initiated talks with ATM manufacturers. Some of the leading manufacturers in the business are Hitachi, Oki, Nautilus Hyosung and Perto.


With the government’s new thrust on greater financial inclusion, particularly through the Jan Dhan Yojana, which aims to put a bank account in the hands of every unbanked household in the country, white label ATMs are expected to meet the demand for greater number of cash withdrawals. What’s more, the government plans to channelise all financial benefits like subsidies as a direct cash transfer through such bank accounts.

The Jan Dhan Yojana has already registered more than 100 million new accounts, bringing a significant number of unbanked and under-banked persons into the formal banking system. However, even as the overall number of ATMs, including those of banks, has increased, there has been no reduction in average number of transactions per ATM, suggesting a demand-supply gap in the ATM industry. With a huge lag in ATM density compared to other countries, banks alone cannot meet the demand-supply gap in ATMs, Chaturvedi said.

Because there can only be limited growth in the number of bank branches serving customers due to cost concerns, white label ATMs are the only option for cash withdrawals, Chaturvedi added.

At 187,000 ATMs, India has less than one-third the number of ATMs than China which has about 600,000 ATMs. Thus, given that India has less than 200,000 ATMs, even setting up 50,000 ATMs over five years – as Essel Finance plans to do – will not be enough to close the gap with China.


ATMs run on high fixed costs such as rent, security, electricity and services with relatively low variable expenses. Thus, economies of scale become critical for an ATM operator to be profitable within the existing regulated revenue framework. ATMs operate using the National Financial Switch, which is managed by the National Payments Corporation of India. 

Chaturvedi said the group hopes that the government will support white label ATM operators through timely reforms in the revenue framework.

The decision to partner with a large ATM manufacturer who is keen to enter India will help the latter enter a developing market with significant potential, while reducing capital expenditure costs for the operator; in this case, Essel Group.

ATMs also need to be set up in locations accessible and useful to customers; this is where the Essel Group’s consumer-facing businesses such as Dish TV and Zee Learn and their channel and franchisee partners can provide customer touch points.

What will also help is that the space requirement for an ATM unit is quite small. Thus, consumer-facing businesses can provide access to an existing high footfall area, while providing the benefit of lower rentals and existing electricity & internet connections.

There is also the possibility of Essel Group working together with co-operative banks and regional rural banks on this project. “The group is also working on a few new business models which will help us reduce capital expenditure and operating costs,” Chaturvedi said.

Essel’s white lable ATM foray

  • Total investment pegged at Rs 2,500 crore
  • Will rope in ATM makers who are not in India now
  • Set up ATMs at Dish TV, Zee Learn touch points
  • Take private equity player on board for financing
  • Alliance with co-operative banks, rural banks to control cost


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