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RBI: Banks must be penalized if they fail to replenish currency notes in ATMs on time

Banks will now have to pay a penalty if they don’t have cash in their ATMs. The Reserve Bank of India will put into force the Scheme of Penalty for non-replenishment of ATM later this year.

The RBI is concerned about the annoyance caused to the public by the lack of cash in ATMs. The central bank , has decided to penalise banks for failing to timely replace currency notes in such machines. From October 1, 2021, forward, the RBI will begin levying penalties on banks if ATMs are out of cash for a total of 10 hours in a month.

In a circular, the RBI stated, “The Scheme of Penalty for Non-Replenishment of ATMs has been developed to guarantee that sufficient cash is available to the public through ATMs.”

 The Scheme will enter force on October 01, 2021.

The RBI’s mandate is to issue banknotes, which the banks are carrying out by dispensing banknotes to the general people through their extensive network of branches and ATMs.

In this regard, it was noted that an assessment of ATM downtime due to cash-outs was conducted, and it was discovered that ATM operations affected by cash-outs result in the non-availability of cash, causing avoidable inconvenience to the general population.

As a result, banks and White Label ATM Operators (WLAOs) have agreed to improve their systems and methods to monitor cash availability in ATMs and ensure timely replenishment to reduce cash outs, according to the RBI.

The central bank said, “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.”

The RBI stated that the criteria for counting cash-outs in an ATM would apply “where the consumer is unable to withdraw cash due to non-availability of cash in a particular ATM.”

The central bank stated that “cash-outs at any ATM for more than ten hours in a month” will result in a flat penalty of Rs 10,000 per ATM.

In the case of White Label ATMs (WLAs), 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, it added. At the end-June 2021, there were 2,13,766 ATMs of different banks in the country.


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