The Reserve Bank of India (RBI) has allowed cooperative banks with core banking solution (CBS) to issue ATM cards/ATM-cum-debit cards in partnership with sponsor banks.
"We have been receiving representations from banks not having their own ATMs seeking permission to issue ATM-cum-debit cards to their customers in tie-up with banks having their own ATM network," the country’s central bank said.
The decision is taken in an attempt to shift towards a less-cash economy and increase the habit of using electronic payment channels among bank customers.
RBI has also mandated guidelines to become sub-member of the National Financial Switch (NFS) for carrying out such transactions.
Banks need to develop their own arrangement for issuing cards, authorisation of cards, customer support/redressal mechanism, as well as comply by the risk management requirements prescribed by the sponsor bank.