ATM Cash-Out Fine: The Reserve Bank of India (RBI) has taken out a new instruction that if the ATM cash-out happens for 10 hours in a month i.e. the ATM is empty, and then every time the ATM is empty, then banks will have to pay a fine of Rs 10,000. A mixed reaction is coming to this direction of RBI. ATM operators and cash-in-transit companies are raising their hands saying they will not bear the fine. ATM operators are known in the industry as Managed Service Providers or MSPs.
In a circular to banks this week, the RBI said that they should monitor the availability of cash in ATMs and ensure that there is no cash-out. According to the circular, banks will be fined Rs 10,000 if cash is out in an ATM for more than 10 hours in a month.
A senior executive of an MSP firm says that there are some places where the cash in ATMs runs out within a few hours of loading. It may not be possible to operate these machines if fines were imposed every month.” There are 2,13,766 ATMs in the country. Most of them are managed by MSPs who employ cash-in-transit companies to refill the currency notes in the machines.
According to MSP, the rules have a good purpose as they recognize the role of cash in the economy and place the onus on banks to ensure availability of cash. But the fines are not well thought out as banks outsource most of the work and consider the rules to be applicable to MSPs.