Banks to pay penalty if their ATMs run out of cash, says RBI

Cash-out at any ATM of more than 10 hours in a month will attract a flat penalty of Rs 10,000 per ATM.

Staff Writer   /   August 17, 2021

A review of downtime of ATMs due to cash-outs was undertaken by the RBI 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. Thus, the central bank has directed all banks/white label ATM operators (WLAOs) to strengthen their systems/ mechanisms to monitor availability of cash in ATMs and ensure timely replenishment to avoid cash-outs. Any non-compliance in this regard will be viewed seriously and will attract monetary penalty.

Cash-out at any ATM of more than 10 hours in a month will attract a flat penalty of Rs 10,000 per ATM.

In 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.

The RBI has directed banks to submit system generated statement on downtime of ATMs due to non-replenishment of cash to the department of RBI under whose jurisdiction these ATMs are located.

In case of WLAOs, the banks which are meeting their cash requirement shall furnish a separate statement on behalf of WLAOs on cash-out of such ATMs due to non-replenishment of cash. Such statements shall be submitted for every month within five days of the following month i.e., first such statement for the month of October 2021 shall be submitted on or before November 05, 2021 to the RBI department concerned.

The scheme will be effective from October 1, 2021. Therefore, banks/ WLAOs would do well to put in place a robust system for monitoring the availability of cash in ATMs and ensure timely replenishment to avoid cash-outs.

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