Starting October 1, RBI to levy penalty on ATMs that run out of cash

The Reserve Bank of India (RBI) has asked banks and white label automated teller machine (ATM) operators to put in place a robust system that will allow them to monitor the availability of cash in ATMs and ensure timely replenishment to avoid cash-out situations.

The central bank has introduced a 'scheme of penalty for non-replenishment of ATMs', effective October 1, 2021, wherein banks and white label ATM operators will be penalised, in the event of cash-outs beyond the permissible time limit.

According to the scheme, a penalty of Rs 10,000 per ATM will be levied in the event of a cash-out situation for more than 10 hours in a month. “In the case of white label ATMs, the penalty would be charged to the bank which is meeting the cash requirement of that particular white label ATM. The bank, may, at its discretion, recover the penalty from the white label ATM operator”, RBI said.

The RBI has said banks have to submit system-generated statements on the downtime of ATMs due to non-availability of cash to the ‘Issue Department’ of RBI, under whose jurisdiction the ATMs are located. For white-label ATM operators, who depend on the banks to replenish their cash requirements, the banks should furnish a separate statement on cash-out of such ATMs due to non-replenishment of cash.

“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”, RBI said.

The officer-in-charge at the ‘Issue Department’ of RBI’s regional office is the competent authority to levy the penalty on banks for non-availability of cash in ATMs in their jurisdiction.

“Appeal against the decision of the competent authority, if required, may be made by the banks/ white label ATM operators to the Regional Director/Officer-in-charge of the regional office concerned, within one month from the date of imposition of penalty,” RBI said.