New Delhi: In a bid to increase the penetration of banking services, the Finance Ministry has favoured setting up of white-level ATMs in the country.

White-level ATMs are not owned by banks but by private ATM service providers. Customers from any bank can deposit or withdraw money from such ATMs.

"Such ATMs will help take banking services to remote places," official sources said.

Besides, it will help sponsored banks to set-up ATMs without incurring capital expenses for owning money dispensing machine, sources said.

The Finance Ministry has given its view to the Reserve Bank in this regard, sources said, adding that the lead bank or sponsored bank of a district would be given the responsibility of filling cash and meeting other operational requirement.

Thus, the bank will be saved from making investment for setting up ATMs, and even other expenses like technical infrastructure and security would be borne by non-bank entities.

Currently, white label ATMs are not permitted by the RBI.

State-owned IDBI Bank is considering to create a separate venture with private ATM service providers for running white-label ATMs, so called because they are not owned by any bank.

At present, brown label ATMs are allowed in the country. In such cases, the hardware as well as lease is under the ownership of the service provider, while connectivity and cash handling and management is the responsibility of the sponsor bank.

The ATM is named under the brand of the sponsor bank but the ATM machine is not owned by the bank.

At present, banks allow customers of other banks five free-of-charge cash withdrawals at their ATMs every month but end up paying around Rs 3,000 crore a year to settle inter-bank transaction costs.

At present, the installed base of ATMs is India is 75,000 as of June 2011.