What is Kiosk Banking: Features and How to Start It in 2023?
Banking kiosks or ATMs are available at multiple locations across India, mostly in remote and rural areas. These enable customers to access at least the basic banking facilities like making deposits, withdrawals, and more. The word ‘Kiosk’ is a short form for Norwegian phrase Kommunikasjon Integrert Offentlig Service Kontor, which means a small, open-fronted cubicle. In banking terms, it is a service introduced for bringing common banking services to remote and low-income sections of the society.
In this blog, we explore what makes kiosk banking so popular, and how it is playing an important role in introducing a growing number of people to modern banking.
What is Kiosk Banking?
Kiosk banking is an initiative by the Reserve Bank of India (RBI) to promote financial inclusion and security in rural and remote areas of the country. Since access to all banking facilities could be limited in rural and remote areas, primarily due to the lack of operational bank branches, such an initiative was highly likely to promote kiosk banking.
The primary reason for launching the initiative was to enable easy access to banking facilities for as many people as possible, regardless of the time of day.
Customers can access traditional banking facilities, including money transfers, deposits, withdrawals, and more. Furthermore, kiosk banking also enables customers to check their bank balances.
How Does Kiosk Banking Work?
No matter who they are or where they live, financial inclusion through kiosk banking is crucial for maintaining the economic stability of all the country’s residents. It is beneficial for times when a customer cannot visit the bank due to a lack of operational bank branches nearby. Instead, the bank comes to the region to handle transactions, grant credit, and facilitate access to these services for low-income groups.
Kiosks – small booths with internet connections and staff to assist customers in using essential bank services have been set up throughout India. Many mainstream banks across private, public, and cooperative have opened kiosks for customers. Services, including withdrawals, deposits, and remittances, are typically offered at kiosks.
The kiosks serve as a point of contact between the public and the banks. Requests made in a kiosk are typically routed to the nearby branch for processing, such as requests to open a bank account or create a deposit.
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Components of a Kiosk Banking System
The kiosk banking system has the following two components:
1. Customer Service Point (CSP)
Customers can contact a kiosk bank CSP to raise concerns regarding any account procedures and transactions to get quick solutions.
2. Kiosk Machine
The second component of a kiosk banking system is a kiosk machine. It enables customers to perform transactions and other banking services, including cheque deposits, balance inquiries, and more.
The components of a kiosk banking machine include the following:
- Barcode scanner
- Integrated full-page thermal printer
- Cash acceptor
- Integrated speakers
- Touch and non-touch displays
- Keyboard with trackball
- Video camera
Features of the Kiosk Banking System
Listed below are the primary features of the kiosk banking system:
- A no-frills zero balance savings account is usually available through the kiosk banking system.
- The maximum balance that you can maintain is Rs.50,000. The account will convert to a standard bank account if the balance is more than Rs.50,000.
- The daily maximum transaction amount is Rs.10,000.
- Transactions may only be made in cash and only by the account holder.
- The savings account can be accessed with a digital thumbprint rather than a signature.
- The kiosk banking system offers its customers accidental coverage of Rs.10,000.
- Customers can also open a Fixed Deposit (FD) and Recurring Deposit (RD) account.
Purpose of Kiosk Banking
This banking feature was introduced to assist and benefit the unbanked population, and those unable to keep a minimum balance in their accounts. In addition, it also serves those who cannot travel great distances and do not have access to basic banking facilities in their areas.
More importantly, customers can do several banking transactions with this service, including microlending and insurance, as well as money transfers, account openings, cash withdrawals, remittances, and cash deposits.
Benefits of Kiosk Banking System
Here are the most prominent benefits of an online kiosk banking system:
- Kiosk machines, or Customer Service Points (CSP), are located near customers’ homes, making it convenient for them to access the facility.
- There are no queues because kiosks are positioned in shops or as small booths.
- Banks now have easier access to the check-drop facility.
- Customers can conduct RTGS and NEFT transactions.
- KYC paperwork and other processes are streamlined in the case of kiosk banking.
- It now includes an internet banking feature for online transactions.
- The fees associated with financial transactions are minimal or zero.
- The working hours of kiosk machines depend on the location of the retail outlet or store hours.
- Cash deposits can be made anywhere without having to spend money on transportation.
- It also acts as a source of income for shop owners and retailers who get the kiosk machines installed in their shops or outlets.
- Shop owners can earn commissions on every cash withdrawal or deposit transaction and on opening new accounts, money transfers, etc.
Differences Between a Kiosk and an ATM
Listed below are the primary differences between ATMs and kiosks:
- Inquiries about accounts, such as requests for chequebooks, are available at kiosks but not necessarily at ATMs.
- Customers can access customer service tools at kiosks connecting directly to the bank’s help desk.
- Kiosks offer MIS reporting, but ATMs don’t.
- Kiosks provide users access to Internet banking features to perform online transactions.
Eligibility to Start a Kiosk Banking Business
Here’s the eligibility to start an online kiosk banking business:
- Individuals, store owners, merchants, and small business owners can start a kiosk banking business on their property.
- Age requirements: The applicant must be at least 18 years old.
- Required area: 100 to 200 square feet.
- Access to computers, printers, and the Internet
- Shop owners who now oversee Customer Service Points (CSP) can launch a kiosk banking business.
- The business entity should be registered under the Ministry of Micro, Small, and Medium Enterprises (MSME).
Documents Required for Kiosk Banking
You will need the following documents to start a kiosk banking business:
- Duly filled application form obtained from the desired bank with two passport-sized photographs
- KYC documents of the applicant, including the applicant’s PAN card, Passport, Voter’s ID card, Aadhar card, Driving Licence, Utility Bills (Water and Electricity Bills)
- The shop’s address proof
- Last 12 months’ bank statement
- Ration card
- Any other documents required by the lender.
How to Get Started with Kiosk Banking?
It may seem challenging to set up kiosk banking. However, the process is significantly streamlined once a reliable, skilled manufacturer is found to design and build the kiosk. When setting up a new kiosk banking service, keep the following in mind:
- Step 1: You must contact an established and trusted kiosk manufacturer.
- Step 2: You must understand the environmental requirements for operating a kiosk banking service, including space, availability of electrical connections, internet accessibility, and more.
- Step 3: Once the above process is complete, you can deploy the kiosks and measure customer interactions to better respond to customer demands.
Things to Know Before Beginning with Kiosk Banking
Listed below are some crucial aspects you should consider before venturing into kiosk banking:
- The expenses for setting up kiosks could be high, which many small businesses might find hard to afford..
- The transactions are limited. Thus, the staff will have to oversee customers’ queries regarding transactions.
- Banking kiosks could be prone to theft and vandalism.
- Customers in rural and remote areas might need time to get accustomed to using banking kiosks.
- There is a lack of personal interaction.
Final word
Account opening and monitoring, cash deposits and withdrawals, money transfers to other bank branches, etc. are a few services provided by kiosk banking. Besides other advantages, the poorer segments of society are able to create ‘no-frills’ bank accounts and access basic banking facilities even at remote locations with the help of kiosk banking.
FAQs
The services offered by kiosk banks include fund transfers, cash deposits, cash withdrawals, check clearance, passbook entries, issuing chequebooks, loan facilities, printed statements, and more.
The minimum age required to apply for kiosk banking is 18 years.
The maximum limit of transactions you can make from a banking kiosk is Rs. 10,000.
Yes, kiosk banking allows customers to start FD and RD accounts.
Yes, the kiosk banking system has been established by the Reserve Bank of India (RBI) as a means to provide banking services to rural and remote parts of the country.
Disclaimer
This article is solely for educational purposes. Navi doesn't take any responsibility for the information or claims made in the blog.
