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Non-banks can set up ATMs: RBI
- The Reserve Bank of India has decided to permit non-banks to set up, own and operate automated teller machines (ATMs) to accelerate the growth and penetration of ATMs in the country.
- Such ATMs will be in the nature of white label ATMs (WLA) and would provide ATM services to customers of all banks
- “There is abundant scope and a felt need to deploy more ATMs, particularly in Tier III to VI areas of the country,” the RBI said.
RBI realigns Bank Rate with MSF
- The Reserve Bank of India (RBI) has decided on Monday to increase the Bank Rate by 350 basis points from 6 per cent to 9.50 per cent per annum with immediate effect.
- The RBI said that it realigned the Bank Rate with Marginal Standing Facility (MSF) rate, which, in turn, is linked to the policy repo rate.
- Henceforth, whenever there is an adjustment of the MSF rate, the Reserve Bank will consider and align the Bank Rate with the revised MSF rate.
- Being the discount rate, the Bank Rate should technically be higher than the policy repo rate.
- The Bank Rate has, however, been kept unchanged at 6 per cent since April 2003. This was mainly for the reason that monetary policy signalling was done through modulations in the reverse repo rate and the repo rate till May 3, 2011, and the policy repo rate under the revised operating procedure of monetary policy from May 3, 2011 onwards.
- Under the MSF, banks are permitted to avail themselves of funds from the RBI on overnight basis.
- The Bank Rate acts as the penal rate charged on banks for shortfalls in meeting their reserve requirements (cash reserve ratio and statutory liquidity ratio). The Bank Rate is also used by several other organisations as a reference rate for indexation purposes.
