CATMi protests RBI's new penalty rule on ATMs with no cash
The ATM body had sent a communication to the banking regulator and had requested to review the penalty decision
Confederation of ATM Industry (CATMi) has come out with a protest on the latest decision of the Reserve Bank of India (RBI) to impose penalty on banks if an Automated Teller Machine (ATM) runs out of cash for more than ten hours in a month. The RBI said that the penalty would be levied on the banks, but the reality is 60-70% of the ATM fleet is managed by outsourcing companies.
The ATM body had sent a communication to the banking regulator and had requested for a review of the penalty decision.
Ground Realties not considered by RBI
According to CATMi, ground realities were not considered before formulating the decision, and the officials were also surprised that there was no consultation with the industry players before the decision was announced.
A CATMi official who spoke with the Business Standard said that cash availability is a major issue, as Rs 2,000 denomination is not readily available which means that ATMs will only have lower denomination notes. This increases the chances of the machine running out of cash sooner. Adding to that, storage and vaulting facility is not available everywhere.
He also said that, service providers are faced with restrictions on cash movements in rural and semi-urban areas after a particular time. The Ministry of Home Affairs (MHA) restricts cash movement after 6:00 PM in semi-urban areas and after 4:00 PM in rural areas. In addition to that, the number of Cash in Transit Companies (CITs) are low, and they do not offer services in deep rural areas.
Further, overnight vaulting facility is not available which means that if a CIT is left with excess cash, they have to go back to the bank and deposit the same in the vault, as CITs are not allowed to keep the cash with them, he added. At the end of June there were 2,13,766 ATMs in the country.