The Reserve Bank of India (RBI) on August 3, 2012 said that the penetration of ATMs (automated teller machines) is still very low compared to the other emerging markets. The RBI added that the penetration is low despite the fact that the number of ATMs have increased by 25 percent every year.

D Subbarao, the RBI governor said, “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”. In terms of proportions, India has the west number of ATMs and point of sales terminals.

Subbarao added, “Disappointingly, the penetration of debit cards has been shallow. One disincentive is the business cost to merchants”. The governor said that so as to increase the penetration of ATMs in India the RBI has permitted the non-bank entities to deploy ‘White Label ATMs’ especially in the smaller centres on own and operate basis.

The Reserve Bank has also decided to introduce differentiate MDR for debit card transactions. Under the new policy the MDR for usage of debit cards should not exceed 0.75 percent of the transaction value for transactions up to Rs. 2000.