RBI will penalise banks if ATMs go dry

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Taking cognisance of the pressing issue of non-availability of cash in ATMs, the Reserve Bank of India (RBI) has decided to penalise banks that fail to replenish the machines in time. Starting October 1, the RBI will start penalising banks if their ATMs remain “out of cash” for a total of 10 hours in a month. “A review of downtime of ATMs due to cash-outs was undertaken and it was observed that ATM operations affected by cash-outs lead to non-availability of cash and cause avoidable inconvenience to the members of the public,” the central bank said in a circular.

It further added that a scheme of penalty for non-replenishment of ATMs has been formulated to ensure that sufficient cash is available to the public through ATMs.

The RBI is responsible for issuing banknotes and other banks are responsible for dispensing them to the public through their network of branches and ATMs. After conducting a review of ATMs, RBI found out that the citizens face inconvenience due to the non-availability of cash.

White Label ATM operators

Banks and White Label ATM Operators (WLAOs) were directed by RBI to strengthen their systems and mechanisms to look after the availability of cash in ATMs and make sure they are replenished on time to avoid cash-outs.

The central bank also said that “any non-compliance in this regard shall be viewed seriously and shall attract monetary penalty as stipulated in the scheme of penalty for non-replenishment of ATMs”.

Quantum of penalty

The RBI has also set the quantum of penalty for the non-replenishment of ATMs. According to the circular, for every ATM that is out of cash for more than 10 hours a month, the bank will face a fine of Rs 10,000 per ATM.

For WLAOs, the penalty would be charged to the bank which is meeting the cash requirement of that particular WLA. The bank may, at its discretion, recover the penalty from the WLA operator, the RBI further added in the circular.