Updated By SaraNextGen

On April 24, 2024, 11:35 AM

RBI’s New Guidelines - To Penalise the Banks If ATMs Run Out Of Cash From 1st October 2021 | Monitoring of Availability of Cash in ATMs

1. In a great relief to customers who are in need of withdrawing cash from ATMs, the Reserve Bank of India (RBI) on Tuesday decided to impose heavy monetary penalty on banks if their ATMs run out of cash from 1 October 2021

2. The RBI will start imposing penalty 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.

3. "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.

4. The Reserve Bank of India has asked banks and White Label ATM Operators (WLAOs) to strengthen their systems to monitor availability of cash in ATMs and ensure timely replenishment to avoid cash-outs, failing which monetary penalty will be imposed on them.

Scheme of Penalty for non-replenishment of ATMs

Objective of the Scheme

1. The Scheme of Penalty for non-replenishment of ATMs has been formulated to ensure that sufficient cash is available to public through ATMs.

Effective Date

1. The Scheme shall be effective from October 01, 2021. Therefore, banks/ WLAOs should put in place a robust system for monitoring the availability of cash in ATMs and ensure timely replenishment to avoid cash-outs.

Condition for counting instances of cash-outs in an ATM

1. When the customer is not able to withdraw cash due to non-availability of cash in a particular ATM.

Procedure

1. Banks shall submit system generated statement on downtime of ATMs due to non- replenishment of cash to the Issue Department of RBI under whose jurisdiction these ATMs are located.
2. 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.
3. 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 Issue Department concerned.

Quantum of Penalty

1. Cash-out at any ATM of more than ten hours in a month will attract a flat penalty of ₹ 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.

Administration of the Scheme

1. The Scheme of Penalty will be administered by Issue Departments of the Regional Offices of the Bank.
2. The Competent Authority to impose penalty will be the Officer-in-Charge of the Issue Department of the Regional Office under whose jurisdiction the ATMs are located.
3. Appeal against the decision of the Competent Authority, if required, may be made by the banks/ WLAOs to the Regional Director/Officer-in-Charge of the Regional Office concerned, within one month from the date of imposition of penalty.
4. As the intention of the Scheme is to ensure replenishment of ATMs in time, appeals would be considered only in cases of genuine reasons beyond the control of bank/ WLAOs such as, imposition of lockdown by the State/ Administrative authorities, strike, etc.