RBI: ATMs Liable to Pay a Penalty When Out of Cash

ATMs running out of cash for more than 10 hours per month will be liable to pay Rs 10,000 as the penalty. The Reserve Bank of India (RBI) informs banks and white-label ATM operators to install a powerful system that will check the cash availability in ATMs and ensure timely replacement to prevent cash-out situations.

The penalty scheme concerning the non-replenishment of ATMs will be effective 1 October 2021. Banks and white-label ATM operators will be subjected to a penalty for a cash-out event beyond the permitted time limit.

For white-label ATMs, a penalty will be levied to a concerned bank responsible for replacing cash in that specific white-label ATM. The bank, at its discretion, may recover the penalty amount from the white-label ATM operator.

As per RBI, banks will need to present system-generated statements to the ‘Issue Department’ of RBI as per the ATM’s jurisdiction. These statements will be regarding the ATM’s downtime because of the non-availability of cash. In the case of white-label ATM operators who rely on banks for cash replacement, the banks will need to submit a separate statement regarding cash-out of such ATMs because of non-replenishment of cash.

The system generated statements will have to be submitted monthly within five days of the succeeding month. For example, the statement concerning October 2021 will have to be submitted to the concerned Issue Department on or before 5 November 2021.

The officer-in-charge at the RBI regional office’s ‘Issue Department’ will impose a penalty on banks concerning cash non-availability in ATMs that come under their jurisdiction.

Banks and white-label ATM operators can appeal against the competent authority’s decision (if needed) to the officer-in-charge/Regional Director of the concerned regional office in less than one month from the date the penalty was levied.

For any clarifications/feedback on the topic, please contact the writer at bhavana.pn@cleartax.in