New ATM rule: The newly launched initiative under the ‘Scheme of Penalty for non-replenishment of ATMs’, will come into effect from 1 October
Can't withdraw money as ATM ran out of cash? This issue will soon be taken care of. The Reserve Bank of India (RBI) has recently decided to impose penalties on banks if ATMs fail to replenish currency notes. The main objective behind the scheme is to ensure that sufficient cash is available for the public through ATMs.
Shruti Khandare, Chief Marketing Officer, MyFundBazaar, said that while the on-ground implementation of RBI is the key to efficient cash-forecasting, but the penalty approach alone is implausible to resolve the issue of ATM cash accessibility.
"The penalty approach alone is implausible to resolve the issue of ATM cash accessibility, despite the objective behind the RBI proposition being purposeful. While the on-ground implementation of RBI is the key for efficient cash-forecasting & prompt availability of currency to upload ATMs on time with sufficient amount of money, what really needs to be addressed is the fundamental cause of every ATM running dry - sub optimal cash-forecasting & the delay in the availability of ATM-fit currency," said Shruti Khandare.
Sonali Kulkarni, Lead – Financial Services, Accenture in India said that initially banks and ATM managed service providers may experience some teething troubles but this will ensure adequate cash available to the public
“While banks and ATM managed service providers may experience some teething troubles in adapting to the new RBI guideline on non-replenishment of ATMs, the guideline will ensure uninterrupted and adequate cash availability to the public."
She further added that banks will need to adopt a data-driven approach and leverage machine-learning powered predictive analytics to forecast cash management at ATMs and thereby, manage liquidity more effectively
"During the pandemic, a large number of banks in India discovered the merits of data and AI-driven risk discovery and mitigation. Today, we see banks investing in advanced analytics that enables early warnings on market and credit risk. We see the same scenario being mirrored in ATM operations management. Banks will need to adopt a data-driven approach and leverage machine-learning powered predictive analytics to forecast cash management at ATMs and thereby, manage liquidity more effectively," she said.
The newly launched initiative under the ‘Scheme of Penalty for non-replenishment of ATMs’, will come into effect from 1 October. RBI also asked the banks to ensure there are no cash-out situations. "The 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 said in a circular.
₹10,000 penalty for non-availability of cash at ATMs
The RBI will start imposing penalties on banks in case the ATMs remain out-of-cash for a total period of 10 hours in a month from October 1, 2021, onwards. As regards the quantum of penalty, the central bank said "cash-out at any ATM of more than ten hours in a month" will attract a flat penalty of ₹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.
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