The research house says that the number of ATMs in India has doubled in just three years, to nearly 100,000, serving a rapidly growing banked middle class.

However, this growth has been largely focussed on big urban areas, reaching a sizeable population with relatively low investment in infrastructure. In spite of the rapid ATM growth, regions beyond India's largest cities remain largely underserved.

To address this, the Reserve Bank of India (RBI) has been trying to design policies to encourage financial institutions to look beyond the top cities. This means changes to strict regulations that have prohibited non-banking companies from carrying out banking operations.

Traditionally, banks owned their own ATMs but they are increasingly sharing networks to increase reach and now, with the RBI's approval of white-labelling, are set to turn to outsourcing.

Arin Ray, analyst, Celent, says: "This change will have important implications for market players. Banks are slowly expected to move out of ATM operations and focus on their core business. Given that many of them have already built up a significant ATM base, they are unlikely to completely abandon their role in ATM management."

Most of the new ATMs will be deployed in tier two and three cities, and a large proportion of them will be established following the 'brown-label' outsourcing model - where hardware is owned by a vendor but the bank provides cash management and network connectivity - in the next four years.

But Celent says that it is the white-label ATM model that has the potential to revolutionise the ATM landscape, and the implications for vendors are serious. Hardware vendors will see demand for their machines grow and given that almost all of them are engaged in services and maintenance, some may move into the domain of white-label ATMs.

Large local players that provide managed and outsourcing services are likely to move up the value chain and consider the white-label opportunity while other firms associated with this industry, like telecom operators, network companies, and security and infrastructure providers, will also see growth opportunity, predicts the research house.