Rs 10,000 Penalty For Govt, Private Banks If There Is No Cash In ATM From This Date!

RBI has announced that it will pose a penalty to banks if they fail to replenish cash in ATMs.

Quantum Of Penalty

A penalty of Rs 10,000 per ATM will be levied on banks if the ATMs remain cashless for a total 10 hours in a month.

This will go into effect from October 1, 2021 onwards.

Banks Can Appeal Against Fine

Banks can appeal against the penalty to the Regional Director/Officer-in-Charge of the Regional Office concerned, within one month from the date of imposition.

Appeals would be entertained only in cases of genuine reasons beyond the control of bank/ White Label ATM Operators (WLAOs) such as imposition of lockdown, strikes,etc.

RBI Reviews Situations Of ATMs Running Out Of Cash

RBI said that it has formulated a Scheme of Penalty for non-replenishment of ATMs.

This is so as to ensure there is no avoidable inconvenience for the public for being unable to withdraw cash due to ATMs running out. 

The RBI issues banknotes which banks then dispense to the public through their branches and ATMs.

It then reviewed downtime of ATMs due to cash-outs when it saw that such instances led to preventable inconvenience to the public due to non-availability of cash.

It then decided that banks/ WLAOs should “strengthen their systems/ mechanisms to monitor the availability of cash in ATMs and ensure timely replenishment to avoid cash-outs. “

What Is A White Label ATM?

WLAs are set up, owned and operated by NBFC (Non-Banking Financial Institutions).

These ATMs, however, do not support cash deposit or cash acceptance.

They are a key part of the government’s financial inclusion agenda as they have geographical spread to reach people in far flung areas.

Penalty In Case Of WLAs

WLAs will attract a penalty which will be posed on the bank which is responsible for meeting the cash requirement of that particular WLA.

The bank may recover the penalty from the WLAO at its discretion.

Banks Ordered To Submit Monthly Statements

Banks will have to submit a system-generated statement on the downtime of ATMs due to unavailability of cash to the ‘Issue Department’ of RBI under whose jurisdiction the respective ATMs are located.

The officer-in-charge at the ‘Issue Department’ of RBI’s regional office is the competent authority to levy the penalties.

These statements must be submitted every month within 5 days of the following month.

The first such statement after the scheme goes into effect from Oct 1 will have to be submitted on or before November 5, 2021, to the Issue Department concerned.

As of June-end, there are 2,13,766 ATMs of different banks in the country.

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