e-Payments have a long way to go: Subbarao

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Penetration of ATMs in the country is still very low compared to other emerging markets even as the number of automated teller machines is increasing by nearly 25 per cent every year, the Reserve Bank said today.

“Although there has been a steady year-on-year 25 per cent growth in the number of ATMs in the country, their penetration as measured by the number of ATMs per million population is still very low when compared to other emerging markets,” RBI Governor D Subbarao said in his keynote address at at the IDRBT Banking Technology Awards Function.

In proportional terms, India has one of the lowest numbers of ATMs and PoS (Point of Sales) terminals – 63 ATMs and 497 PoS per million population, he said.

“Disappointingly, the penetration of debit cards has been shallow. One disincentive is the business cost to merchants,” he added.

Subbarao said in order to increase the penetration of ATMs, RBI has permitted non-bank entities to deploy ‘White Label ATMs’, especially in the smaller centres on own and operate basis.

The regulatory guidelines prescribe a proportion of ATMs to be necessarily installed in Tier III to Tier VI centres (towns/villages with population of less than 50,000), thereby extending anytime, and anywhere banking facility to a wider segment of population.

Subbarao said as the Merchant Discount Rate (MDR) for debit and credit cards has been uniform in India, the RBI has decided to introduce new payment charges for debt card usage.

“The Reserve Bank decided to introduce a differential MDR for debit card transactions. Under this recently announced policy, the MDR for usage of debit cards should not exceed 0.75 per cent of the transaction value for transactions up to Rs 2000, and not exceed 1 per cent for transactions above Rs 2000,” the banking regulator said.

Speaking on mobile banking penetration, Subbarao said as of June, 2012, as many as 50 banks were providing mobile banking services with an aggregate customer base of 14.75 million.

Both the volume and value of mobile banking transactions are witnessing a remarkable growth.

As of June 2012, a year-on-year growth in terms of volume was 143 per cent while that in terms of value was 213 per cent, he added.

The RBI Governor said when compared with other emerging markets like Brazil, Mexico and Russia, the value of banknotes and coins in circulation in India, at 12 per cent of GDP, is high.

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