What is Kiosk Banking ? Definition, Eligibility, Benefits & Features

Kiosk Banking: ATMs and banking kiosks are widely available across India, especially in rural and remote areas. These kiosks provide customers with access to essential banking services such as deposits, withdrawals, and other basic transactions. The term "kiosk" originates from the Norwegian word Kommunikasjon Integrert Offentlig Service Kontor, which refers to a small, open-fronted cubicle. In the context of banking, it is a service designed to offer basic financial services to low-income and geographically isolated communities. The Reserve Bank of India (RBI) introduced kiosk banking to promote financial inclusion and stability in rural and underserved areas where traditional bank branches are either limited or nonexistent.

What is Kiosk Banking ?

Kiosk Banking is a method of financial inclusion that aims to provide banking services to individuals, regardless of their location or identity. It is especially useful in areas where traditional bank branches are not present or easily accessible. Instead of traveling to a bank, customers can access banking services through kiosks that are set up in local communities. These kiosks are typically internet-enabled and staffed with trained personnel who assist customers in performing basic banking tasks such as deposits, withdrawals, and remittances.

Kiosk banking allows for the processing of various financial services in remote or underserved areas. Most mainstream banks, including public, private, and cooperative banks, set up kiosks to offer these services. Services offered at the kiosks include account opening, cash deposits, withdrawals, and money transfers. Once a transaction or request is made at the kiosk, it is forwarded to the nearest bank branch for further processing. This system helps bridge the gap between financial institutions and low-income populations, enhancing accessibility to banking services.

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Working of Kiosk Banking 

Kiosk Banking plays a significant role in promoting financial inclusion, ensuring economic stability for all citizens, regardless of their location or background. It is particularly beneficial in areas where traditional bank branches are scarce, making it difficult for people to access banking services. Instead, the bank reaches out to these areas, providing essential financial services such as credit management, transactions, and support to low-income communities.

In India, kiosks are small booths equipped with internet connectivity and staffed with personnel to assist customers with basic banking tasks. These kiosks are set up by various banks, including public, private, and cooperative institutions. The services provided at these kiosks typically include remittances, deposits, and withdrawals, allowing the public to engage with banking operations. Requests for services such as opening a new account or making deposits are typically forwarded to the nearest bank branch for processing, after being initiated through the kiosk.

In this way, kiosk banking bridges the gap in financial services, especially in remote or underserved regions, by bringing banking closer to the people.

Kiosk Banking System Objective

The objective of the Kiosk Banking System is to provide essential banking services to individuals who are unable to maintain a minimum balance in their accounts, as well as to serve the unbanked population. It is especially beneficial for people living in remote areas with limited or no access to traditional banking services, eliminating the need for long-distance travel to access basic banking. This service allows users to perform a variety of banking functions, including money transfers, account openings, cash withdrawals, deposits, remittances, and micro-lending services, as well as access to insurance products.

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Benefits of Kiosk Banking

• Convenient Access: Customer Service Points (CSPs), also known as kiosk machines, are strategically located near customers' residences, ensuring easy access to banking services.
• Wide Transaction Options: Customers can perform transactions like NEFT (National Electronic Funds Transfer) and RTGS (Real Time Gross Settlement) through kiosks, offering flexibility and convenience.
• No Waiting in Lines: Since kiosks are set up as small booths or within retail stores, customers can access services without waiting in long queues, ensuring quicker transactions.
• Easy Document Submission: Kiosk banking simplifies the process of document submission, including check drops, making it more efficient for customers and banks.
• Streamlined KYC and Procedures: The kiosk system accelerates the Know Your Customer (KYC) process and other banking procedures, making it faster for customers to avail of services.
• Online Banking Services: Many kiosks now come equipped with internet banking capabilities, enabling online transactions such as bill payments, transfers, and balance checks.
• Low or No Transaction Fees: Financial transactions conducted through kiosks generally incur little to no fees, offering a cost-effective alternative for customers.
• Additional Income for Retailers: Retailers and store owners hosting kiosks in their stores can earn extra revenue by facilitating banking transactions.
• Flexible Operating Hours: The operational hours of kiosks are aligned with the retail store's hours, providing customers with more convenience.
• No Need for Transportation: Customers don’t need to travel to make cash deposits or withdrawals, as kiosks offer a convenient alternative close to their location.
• Incentives for Retailers: Retailers receive commissions for transactions involving cash withdrawals, deposits, new account openings, and money transfers, adding an additional revenue stream to their businesses.

Features of Kiosk Banking

• Kiosk banking typically offers a basic savings account with no minimum balance requirement.
• The maximum transaction limit per day is Rs. 10,000.
• The maximum balance allowed in the account is Rs. 50,000. If the balance exceeds this limit, the account will be converted into a regular bank account.
• Instead of a traditional signature, a digital fingerprint is used for account access.
• Transactions can only be made by the account holder and are strictly in cash.
• Customers can also open Fixed Deposit (FD) or Recurring Deposit (RD) accounts through kiosk banking.
• Kiosk banking account holders are eligible for accidental insurance coverage up to Rs. 10,000.

Components of Kiosk Banking 

The kiosk banking system consists of two main parts:

• Customer Service Point (CSP): This is the first component, where customers can seek assistance for resolving issues related to account procedures or transactions. A kiosk bank CSP acts as a point of contact for customer queries and support.
• Kiosk Machine: The second component is the kiosk machine itself, allowing customers to carry out various banking transactions and services, such as checking account balances and making deposits, including cheque deposits.

The main parts of a kiosk banking machine are:

• Cash Acceptor: For accepting cash deposits.
• Keyboard with Trackball: For inputting information and navigation.
• Barcode Scanner: Used to scan documents or identification.
• Integrated Full-Page Thermal Printer: For printing receipts or transaction details.
• Integrated Speakers: For audio prompts or instructions.
• Touch and Non-Touch Displays: For user interaction and display of transaction details.
• Video Camera: To enable remote assistance or video verification.

This system enables efficient and accessible banking services for customers in various locations.

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Requirements to Launch a Kiosk Banking Business

The following criteria must be met to launch an online banking kiosk:

• Anyone can open a kiosk banking company on their property, including individuals, store owners, merchants, and small business owners.
• The candidate must be at least eighteen years old.
• A minimum of 100 to 200 square feet are needed.
• Internet, printer, and computer access
• Shop owners can start a kiosk banking business if they are currently in charge of Customer Service Points (CSP).

The Ministry of Micro, Small, and Medium Enterprises (MSME) shall receive a registration form from the business entity.

Documents Required to launch a Kiosk Banking Business

Some of the important documents required to launch a Kiosk Banking Business are as follows:

• The corresponding bank’s application form filled
• Identity Proof like Aadhaar, Driver’s license, Voter’s ID
• Applicant’s Ration card
• Address proof of the retail shop where the Kiosk is to be set up: Electricity or other amenities bill
• Applicant’s recent photographs

How Does Kiosk Banking Get Started?

Starting a kiosk banking service may seem challenging at first. However, the process can be streamlined once you partner with a reliable and experienced kiosk manufacturer to design and set up the system. Here are the key steps to consider when establishing a new kiosk banking service:

• Partner with a trusted kiosk manufacturer: Choose a reputable and experienced kiosk provider to ensure quality design and installation.
• Understand environmental requirements: Before installation, it's essential to assess the space, electrical connections, internet connectivity, and other necessary infrastructure.
• Install the kiosks and monitor usage: After setting up the kiosks, regularly track customer interactions to gather feedback and improve service offerings based on consumer needs.

Things to Consider Before Using Kiosk Banking

Here are some important considerations before using a kiosk for banking:

• High Setup Costs: The initial costs of setting up a kiosk can be significant, which may pose a challenge for small businesses to afford.
• Limited Transaction Options: Kiosks may not support a wide range of banking transactions, meaning staff might still need to assist customers with more complex queries.
• Security Risks: Kiosks could be susceptible to theft or vandalism, requiring additional security measures to protect the equipment.
• Lack of Personal Interaction: The absence of direct human interaction may impact customer experience, especially for those who prefer face-to-face communication.
• Adjustment Period in Remote Areas: In rural or remote locations, customers may face challenges in adapting to the use of kiosks, requiring time and training to get accustomed to the technology.

Summary of What is Kiosk Banking 2025

Kiosk Banking is a financial inclusion initiative that provides essential banking services in remote and underserved areas where traditional branches are scarce. Using internet-enabled kiosks, customers can perform tasks like deposits, withdrawals, and money transfers. It aims to bridge the gap in financial services, offering convenient and accessible banking to low-income populations without requiring travel to a bank branch.