With the Reserve Bank of India’s (RBI’s) new standards for cash
logistics companies kicking in from July 6, some lenders are raising the
issue of higher costs and are making a case for higher inter-bank
payments for use of automated teller machines (ATMs). On April 6, 2018, the RBI
had come out with new prescriptions for companies that undertake cash
services on behalf of banks. The guidelines were to come in force within
90 days.
Under the new norms, lenders must
ensure that they engage service providers and their sub-contractors with
a net worth of at least Rs 100 crore. In case of existing agreements,
banks have to ensure that the net worth criteria is met by March 2019.
Cash logistics companies need to have a minimum fleet size of 300
specifically fabricated cash vans. These vans should be equipped with GPS, tubeless tyres, an emergency hooter and CCTV covering both passenger and cash compartments.
Rituraj Sinha, group managing director, SIS Group,
said, “The guidelines were much needed, in fact overdue. A working
group created by the Indian Bank Association in 2013-14 had first
highlighted the pressing need for regulating cash logistics operations.
Currency logistics is completely outsourced by banks and demonetisation
highlighted the vital role of private cash logistics operators in the
currency management ecosystem.”
He added that while in the short term
they are likely to push up cost of operations, in the long term they
will save money by improving efficiency and reduce fraud. “The RBI
guidelines are benchmarked with global standards. Currency management is
regulated in most major economies by the central bank,” he added.
According to banks, the RBI also wants
lenders to discontinue open cash replenishment and top-up in ATMs.
Instead, it has asked banks to use lockable cassettes in their ATMs
which shall be swapped at the time of cash replenishment. This move
comes after a couple of incidents where personnel in charge of cash
refilling replaced banknotes with play money. A bank official said,
“Shipping cassettes instead of cash would mean lesser quantity in every
cash van.” It will also increase the transit cycle as cash will have to
be moved from currency chests to bank vaults to refill the cassettes.
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