Concerned about the inconvenience caused to the public by the lack of cash in ATMs, the Reserve Bank has decided to penalise banks for failing to replenish currency notes in such machines on time.
From October 1, 2021, the RBI will begin imposing penalties on banks if ATMs are out of cash for a total of 10 hours in a month.
“The Penalty Scheme for ATM Non-Replenishment has been formulated to ensure that sufficient cash is available to the public through ATMs,” the RBI stated in a circular.
The Reserve Bank of India has a mandate to issue banknotes, which banks fulfil by dispensing banknotes to the public through their extensive network of branches and ATMs.
In this regard, it was stated that a review 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 and cause avoidable inconvenience to members of the public.
As a result, the central bank has decided that banks/White Label ATM Operators (WLAOs) will strengthen their systems/mechanisms to monitor the availability of cash in ATMs and ensure timely replenishment to avoid cash-outs.
“Any non-compliance in this regard will be taken seriously and will result in monetary penalties as stipulated in the ‘Scheme of Penalty for Non-Replenishment of ATMs,'” the RBI stated.
The Scheme will go into effect on October 1, 2021.
The RBI stated that the condition for counting instances of cash-outs in an ATM would come into play “when the customer is unable to withdraw cash due to the non-availability of cash in a particular ATM.”
The central bank stated that “cash-out 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 that is meeting the WLA’s cash requirement.
The bank may recover the penalty from the WLA operator at its discretion, it added.
There were 2,13,766 ATMs of various banks in the country as of the end of June 2021.