Replenish ATMs or pay fine for cash-outs from October, RBI tells banks

Customers now may no more return empty-handed from ATM kisoks, as the Reserve Bank of India (RBI) has announced that banks will be fined if their ATMs are not replenished with cash in time from October 1 onwards.

“A review of downtime of ATMs due to cash-outs was undertaken and it was observed that ATM operations affected by cash-outs lead to non-availability of cash and cause avoidable inconvenience to the members of the public,” RBI said in a statement issued on Tuesday.

The country has a total of 2,13,766 ATMs belonging to different banks as of June 2021.

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The central bank’s directive comes as part of its ‘Scheme of Penalty for non-replenishment of ATMs’. In its statement, RBI said that defaulting lenders will be fined ₹10,000 per ATM in the event of a cash-out situation for more than 10 hours in a month.

“…banks/ White Label ATM Operators (WLAOs) shall strengthen their systems/ mechanisms to monitor availability of cash in ATMs and ensure timely replenishment to avoid cash-outs. Any non-compliance in this regard shall be viewed seriously and shall attract monetary penalty,”.

“The RBI has a mandate to issue banknotes and the banks are fulfilling this mandate by dispensing banknotes to the public through their wide network of branches and ATMs. In this connection, it said a review of downtime of ATMs due to cash-outs was undertaken and it was observed that ATM operations affected by cash-outs lead to non-availability of cash and cause avoidable inconvenience to the members of the public. It has, therefore, been decided that the 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,” the RBI said in the statement.

“Any non-compliance in this regard shall be viewed seriously and shall attract monetary penalty as stipulated in the Scheme of Penalty for non-replenishment of ATMs,” the RBI said.

The central bank said instances of cash-outs in an ATM will be counted once, “the customer is not able to withdraw cash due to non-availability of cash in a particular ATM”.

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While ₹10,000 will be fined per ATM, in the 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, the RBI said.