UPSC Notes EPFO Labour Law

2021-07-20 08:41:26 Art And Culture Question Answer Quiz Open / Comment

2021-07-20 05:30:59 White Label ATM (WLAs)

Prior to setting up of WLAs, only banks were allowed to set up ATMs in India. And majority of these ATMs were covered up in urban areas. Between the years 2008 – 2011 although, nearly 23-25 % growth in the number of ATMs was seen in Tier I and Tier II cities. However, in Tier III & IV cities, the network of ATMs has remained sparse. Thus, RBI decided to rope in private operators to expand the ATM network across a broader customer base. To achieve this, the RBI reviewed the extant policy on ATMs and permitted non-bank entities that are incorporated in India under the Companies Act 1956, to set up and operate ATMs in India. The Reserve Bank of India released the guidelines on “White Label Automated Teller Machines(WLAs) in India” on 20 June 2012.

White Label ATMs are operated by a non-bank entity where customers from any bank may withdraw money. WLAs are ATMs that are deployed by the non-banking financial companies which charge banks a fee whenever the account holders transact. A white-label ATM (WLA) is not owned by a bank but by a private service provider and established under Payments & Settlements Act of 2007.

White Label ATMs are mainly aimed at achieving financial penetration across Tier-I to Tier-VI regions of the country particularly in semi-urban and rural areas. Customers of any bank in India can access these White Label ATMs.

The RBI has licensed seven NBFCs to setup White Label ATMs, these are — Tata Communications Payment Solutions (TCPS), BTI Payments, Prizm Payment, Srei Infrastructure, Muthoot Finance, RiddiSiddhi Bullions and Vakrangee Limited.

First White Label ATM was set up by Tata Communications Payment Solutions, by the brand name of ‘Indicash‘.


Need for introduction of White Label ATMs
So far, the banks have played major role in setting up and encouraging usage of Automated Teller Machines (ATMs) in India. The total number of ATMs set up in India by public, private and foreign banks is around 90,000 ATMs across India, but they are mostly concentrated in the urban areas and cities. While, the other parts of country especially, the tier III to tier VI cities have not seen any substantial growth in number of ATMs, which could have popularised the personal banking in rural areas and could have played an important part in financial inclusion.

Therefore, RBI has relaxed its policy about setting up of ATMs and has allowed the participation of non-banking financial institutions to set up the White Label ATMs. These White Label ATMs are owned and operated by the NBFCs while functioning just in the same way as any other bank-run ATM does.

The RBI aims at expanding the reach of banking services in rural areas since the non-banking financial companies have to maintain a certain ratio of their ATMs between the rural and urban India.
RBI wants to expand the ATM network to ensure financial inclusion. With more and more people indulging in personal banking and having easy access to cash, white label ATMs will deepen the reach of banking services.


Guidelines for White Label ATMs (WLAs)
Since White-label ATMs were introduced to increase the ATM network in semi-urban and rural areas, the RBI has taken measures to ensure this reach. The companies in the WLA segment are mandated to operate 67 % of their ATMs in rural locations (which are tier III to tier VI areas) and remaining 33 % in urban areas (comprising tier I and II cities).

A NBFC or non banking entity has to either of the following schemes for setting up ATMs in India:

Scheme A
Under the scheme A, the NBFC has to follow the given guidelines for establishing financial penetration in various areas.
➨ In Year 1 — have to establish minimum of 1000 WLAs.
➨ In Year 2 — have to establish minimum of twice the number of WLAs installed in Year 1.
➨ In Year 3 — have to establish minimum of three times the number of WLAs installed in Year 2. Open / Comment

2021-07-19 11:39:23 Inflation

Inflation is a rise in the general level of prices of goods and services in an economy over a period of time.
When the general price level rises, each unit of currency buys fewer goods and services. Therefore, inflation also reflects an erosion of purchasing power of money.
According to Crowther, “Inflation is State in which the Value of Money is Falling and the Prices are rising.”
In Economics, the word ‘inflation’ refers to General rise in Prices Measured against a Standard Level of Purchasing Power.

Several variations on inflation used popularly to indicate specific meanings.

➨ Deflation is when the general level of prices is falling. It is the opposite of inflation. Also referred to as Disinflation.The lack of inflation may be an indication that the economy is weakening.

➨ Hyperinflation is unusually rapid inflation in very short span of time. In extreme cases, this can lead to the breakdown of a nation’s monetary system with complete loss of confidence in the domestic currency. One of the earlier examples of hyperinflation occurred in Germany in early 1920s after the First World War, when prices rose 2,500% in one month.

➨ Stagflation is the combination of high unemployment with high inflation. This happened in industrialized countries during the 1970s, when a bad economy was combined with OPEC raising oil prices led to low growth.

Inflation is all about prices going up, but for healthy economy wages should be rising as well. The question shouldn’t be whether inflation is rising, but whether it’s rising at a quicker pace than your wages, if the answer is a Yes only then inflation is problematic.

Finally, inflation is a sign that an economy is growing. The RBI considers the range of 4-5 % as comfort zone of inflation in India. Open / Comment