Kiosk Banking Explained – Meaning, Purpose, and Benefits

February 24, 2025

15 min read

Banking and its associated services have become a part of one’s day-to-day life. Everything from checking balances or depositing cheques, the bank does it all. In the era of developing tools that make our lives a little easier, banks have also opted for tools such as ATMs.

ATMs’ provision has simplified processes like money transfer and withdrawal of cash, which is why it gained popularity amongst the average working individuals that could access money on the go. But, such kind of facility has been far out of the reach of the minority or poverty-ridden sections of the society. This section majorly comprises the daily wage earners that are unable to reach out to the banks for availing the fundamental services.

To bridge this gap, the Reserve Bank of India introduced the much renowned Kiosk based Banking system.

What is Kiosk Banking and its meaning

The word KIOSK stands for Kommunikasjon Integrert Offentlig Service Kontor, and it denotes a small open-fronted hut or a cubicle. In terms of banking, a Kiosk is a service introduced to cater to the banking needs of the low-income sections of the society by bringing the common banking services near their locality.

The kiosk allows the individuals to access the banking facilities such as cheque transfer, transactions, balance inquiry, cash deposit or remittances, etc. They can do all this without having to go to a banking branch. This benefits the LIGs (Low Income Groups) as they get all the services without having to visit the bank. As these individuals are incapable of maintaining a minimum amount in their bank accounts, Kiosk provides them with the ability to maintain their bank accounts without a fret.

Components of Kiosk Based Banking:

KIOSK full form is Kommunikasjon Integrert Offentlig Service Kontor. Full form of Kiosk is a Norwegian phrase which translates to a small and open front hut. Generally, the Kiosk is set-up as a booth in any local shops or retail points available in the neighborhood of villages. This ensures an enhanced reach and greater accessibility to customers.

There are two components of a Kiosk based Banking system:

Customer Service Point (CSP) : These points are put in place to ensure that customer queries are resolved quickly and efficiently. CSP is solely with a purpose of enhancing customer service with an end goal to increase customer stickiness, and revenue.
Kiosk Machine : Kiosk machines are put in place to ease the processes and enable customers to resolve basic queries and maintenance on their own. Kiosk machines increase self reliance of the customers, which decreases the turn around time and offer greater flexibility.

Customer Service Point: It is a counter created in the shop along with the Kiosk booth that enables efficient connectivity to a corresponding private or public bank. The customers may contact CSP to raise concerns regarding any transactions or account procedures and get solutions.

Kiosk Machine: The second portion of the Kiosk booth is the Kiosk Machine that allows the user to perform transactions and other banking services such as cheque deposits, balance inquiries, etc. It consists of Barcode Scanner, Cash Acceptor, Integrated Full-Page Thermal Printer, Integrated Speaker, Keyboard with Trackball, Touch and Non-Touch Display, Video Camera.

Who can start a Kiosk Based Banking system?

The people eligible to apply for setting up a Kiosk Booth include shop owners, retailers, small business owners, or even individuals.

The eligibility criteria for Kiosk based Banking comprises of:

Minimum age limit: 18 years : As the age of adulthood is 18 years, it is kept as the legal age to start a venture. Hence the basic criteria for a person to start a kiosk or to become a kiosk operator is minimum 18 years of age
Qualifications: The individual should have cleared a senior secondary examination. This eligibility criteria is put in place to ensure that the individual willing to start a kiosk based banking system is equipped with a baseline level of knowledge which can help in operating the venture efficiently.
Minimum space required to set up the Kiosk booth: 100-200 Sq. Ft : This is because that’s the least amount of space it would take to set up the kiosk based machine, and relevant tools for the machine to operate efficiently and continuously. 100-200 sq ft. is usually enough and ideal for a Kiosk as these are installed in high traffic areas where the cost of renting or ownership is high, and at the same time, the size is enough to accommodate the machine.
The applicant should ensure provision for computers and the internet : The Kiosk based machines are put in place to offer better customer service at a higher pace and convenience. To accommodate this, the machines are computer based and have to be equipped with the internet. Hence, it is necessary for the operator to ensure that there is provision for both computer based machines and the internet for it to work.

The shop owners or small business owners can incorporate a Kiosk booth alongside a CSP for which the small business should have MSME registration. The equipment required for establishing a Kiosk shall be provided by the bank along that includes a Kiosk machine, a machine for scanning fingerprints, and software compatible with computers.

The procedure of Kiosk based banking:

Initially, the customer shall open a No-Frills Account. No frills account or Basic saving bank deposit accounts (BSBDA) is a basic savings account with usually no other services attached to it, and has zero minimum balance required. This category of account was introduced to increase bank account penetration in India and promote bank accounts among low income groups.
Next, he/she shall proceed with KYC verification : KYC stands for “Know your clients”, KYC is the minimum requirement for doing any financial activity. As it enables the financial institutions to verify the identity of the customer.
The KYC verification is done by the corresponding banks, where they verify the submitted documents.
Once the KYC process has been completed, the individual is free to use his/her account and perform transactions.

Documents Required:

The corresponding bank’s application form filled.
Proof of Identity: Aadhaar, Voter’s ID, Driver’s license
Address proof of the retail shop where the Kiosk is to be set up: Electricity or other amenities bill
Applicant’s Ration card
Applicant’s recent photographs- 2

After gathering knowledge regarding Kiosk based banking fundamentals, let us find out more about the features and benefits of Kiosk Banking.

Kiosk based Banking and its impact on Low-income groups

Features of Kiosk based Banking:

As the Kiosk based Banking system is aimed at providing for the LIGs, the function and layout of these systems are simple. The fundamental features of Kiosk based Banking are as follows:

Kiosk based Banking provides the customers a No-Frills Account: Under such a bank account, the accountholders don’t have to follow a minimum balance custom. They are allowed to open as well as operate a bank account with zero balance. This is helpful for those daily-wage workers who work on a per-day income. The motive behind offering this bank is to increase the penetration of bank accounts in the country, and to move towards a digital economy, as cash transactions may lead to cash hoarding.
Kiosk based Banking provides the customers with an upper limit of Rs.50,000 for their bank accounts. In case the total balance of the account exceeds this amount, then the bank account shall be converted to a regular bank account. The reason being, this bank account is offered with a motive to bring bank account access to the low income section of the society. By introducing this limit, the bank is able to weed out high income individuals taking advantage of the scheme, which in a way is revenue leakage for the bank.
Under Kiosk based Banking, the individual is allowed to make a maximum transaction of Rs.10,000 per day. Again, the reason behind this remains the same. To bring access to the low income group of the society by weeding out customers with a higher earning to stop revenue leakage for the banks.
The individuals are allowed to make transactions only in the form of cash. As electronic banking is cost heavy for the banks where they are not making interest income on balances float, neither are they making income in form of charges.
The cash transactions can be performed with thumb impressions, and there is no compulsion of the accountholder’s signature. This also ropes in the convenience of the transaction for minority sections.
Kiosk based Banking also provides the accountholders an insurance coverage. This coverage is sanctioned under a scenario where the account holder gets in an accident. The insurance amount offered goes up to Rs.10,000.
Kiosk based Banking offers individuals to open a Fixed Deposit or a Recurring Deposit account to develop an investment or savings.

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Benefits of Kiosk Based Banking:

One of the main objectives of starting the facility of Kiosk based Banking was to support the financial needs of the low-income grade individuals and to provide them with benefits like:

Feasibility: Kiosk based Banking has the obvious advantage of being convenient and accessible to even the country’s most remote villages. It helps spread the banking network by an astounding range where the people working in villages can access banks’ facilities. As the Kiosk is installed in the form of booths in the local shops, the people are not required to wait in long queues to get what they want. Essentially enhancing servicing, both in terms of coverage and also convenience.
No limits on minimum balance: Under a Kiosk based Banking system, the candidate is allowed to open a new bank account with a zero balance. There is no necessity for a minimum account balance to use the bank services. This is good for the LIGs and minimum wage workers where they can open and manage a bank account without worrying about the account balance. This is to ensure the coverage and penetration of bank accounts in the country. The aim was to cover maximum people, especially the ones from low income groups of the society, since a major chunk have never been able to benefit from banking services.
NEFT and RTGS: individuals can use kiosk based Banking to perform NEFT and RTGS type of transactions with ease, and they can do so without visiting the bank branch. The kiosks offer internet banking facility, by leveraging the same online transactions can be done with ease and in a time efficient way.
Easier banking processes: Under Kiosk Based Banking, procedures such as KYC and document verification are much swifter and are hassle-free. This decreases the dependency on the physical branch and is much more time efficient.
Internet Banking: Kiosk based Banking also allows the customers to utilize net-banking and make online payments or online transactions with ease.
User-friendly services: Kiosk based Banking provides extensive working hours, zero to nil transaction charges, and a thumb impression for transactions that allow a more comprehensive and pleasant user experience. All in conjunction with each other offer superior customer service.
As a means for business: Nowadays, Kiosk based Business Banking has gained momentum where several small and independent businesses operate with a Kiosk-based system. The Kiosk booths have evolved as a source of business development. Which helps the banks increase their business in a cost effective way.
The shop owners or retailers that incorporate Kiosk booths in their shops also achieve a sense of income boost by the commission earned via cash deposits and withdrawals made using Kiosk.

Kiosk vs ATM

Kiosk based Banking systems were established after the development of ATM. As a result, there are some differences between Kiosk and ATM which can be explained through the services offered by Kiosks such as:

Kiosks offer account inquiries such as checkbook requests that are not offered by ATMs. These increase the convenience to the customers as they do not have to visit the branch and the human dependency is also decreased which ultimately helps with increased efficiency in operations and decreased turn around time to the customers.
Kiosks also provide the customers with customer support tools that connect with the bank’s help desk directly. Such features offer greater convenience as the customers have a known and reliable point of contact to the bank. Kiosks help enhance customer service which increases customer stickiness, and income for the bank.
Kiosks provide MIS reporting, which is not the case with ATMs : These reports can be of great convenience to the bank to derive actionable insights from the kiosks, and how they can better the services to serve the customers more effectively and efficiently.
Another striking difference between Kiosk and ATM is that Kiosk allows a cheque deposit facility, unlike ATM : Again, this enables the customers to complete the cheque deposit tasks in a time efficient way by eliminating the human intervention and dependency. Cheques once deposited in the kiosks can then be taken up by the bank operation for further processing.
Kiosks also offer an Internet banking facility for the user to carry out online transactions : This again offers great convenience but only to the learned users. Internet banking is a fast and efficient way to move funds and carry out account maintenance activities, hence by utilizing kiosks, the users can eliminate the need of going to the banking branch to a great extent.
Kiosks also have a Customer Service Point or CSP to help assist the customers : The basic customer queries can be solved from the kiosk saving the customers time and effort to call or visit the branch. Customer servicing is a strong suite of kiosk based banking services, and is poised to grow even more in the coming years citing large population base and growing banking demand in the country.

Kiosk Banking FAQs:

1. Is it possible for a small business owner to take up Kiosk Banking?

Yes, it is possible for a small business owner to establish a Kiosk Banking provided the business has been registered under MSME.

2. What are the services offered by Kiosk Banking?

Kiosk Banking services include Fund transfer, Cash withdrawals or deposits, passbook entries, clearance of cheque, NEFT, RTGS, Mini statements, issuing checkbook, modification of beneficiary details, loan facility, Kisan credit card, etc.

3. What is the minimum age required to apply for Kiosk Banking?

The minimum age required for Kiosk banking is 18 years.

4. What is the maximum limit of transactions that can be made under Kiosk Banking?

The customers are allowed to make a maximum of three transactions a day, with the maximum amount limit being Rs.10,000 per day.

5. What is the maximum bank balance limit under the No-Frills account?

The customers are allowed to maintain a balance of up to Rs.50,000 under Kiosk banking.

6. Does Kiosk banking allow FD account?

Yes, nowadays, customers can open a Fixed Deposit account using Kiosk banking.

7. Does Kiosk banking offer any insurance?

Yes, the customers can avail of accidental insurance of up to Rs.10,000 under a circumstance where the accountholder suffers an accident.

8. Does Kiosk Banking come under RBI?

Yes, the Kiosk banking system has been established by the Reserve Bank of India as a means to provide banking services to remote parts of the country.

9. Are there any transaction charges associated with Kiosk banking?

The transaction charges can be variable, but they can also be nil, depending on the CSP.

10. How does one procure the application form for setting up Kiosk banking?

One can visit the associated bank’s branch and acquire the bank application form and complete it by submitting the required documents.

11. What kind of financial services can customers access through Kiosk Banking, and how does it benefit them compared to traditional banking methods?

Kiosk banking allows customers to access essential financial services such as deposits, withdrawals, fund transfers, and bill payments at conveniently located bank kiosks. This benefits them by expanding financial inclusion, particularly in remote areas where traditional banking methods are scarce. Kiosk banking provides accessibility wherever possible, making it easier for individuals to manage their finances and access banking services without visiting a full-service branch.

12. Is there a specific location or region where Kiosk Banking is most effective, and how can entrepreneurs identify the right business opportunities for this service?

Kiosk banking is most effective in underserved and remote regions, but it can be viable wherever there’s limited access to traditional banks. Entrepreneurs can identify suitable opportunities by assessing local banking infrastructure, financial literacy, and customer demand. It’s crucial to target areas where people find it challenging to access traditional banking services, ensuring kiosk banking fills a crucial gap wherever possible.