BROWN LABEL ATMs

'Brown label' ATMs are those Automated Teller Machines where hardware and the lease of  the ATM machine is owned by a service provider, but cash management and connectivity to banking networks is provided by a sponsor bank whose brand is used on the ATM.

The 'brown label' has come up as an alternative between bank-owned ATMs and 'white label' ATMs. As in India white label ATMs were not allowed by RBI (in February 2012 RBI has issued the draft guidelines for introduction of white ATMs, but final approval is yet to come), the concept of Brown Label ATMs started picking up. 

On account of the high cost of ATM machines and RBI's guidelines for expansion of ATMs, the concept of Brown Label ATM network is likely to expand at a brisk pace in the next few years. 

In recent years there is a visible shift in the way banks look at ATM business. From the earlier model where banks used to buy outright machines and bear the cost of service, they are now preferring brown label ATMs where the machine and service is outsourced.