New ATM rule: Will transfer to penalise banks guarantee money in ATMs?

Can’t withdraw cash as ATM ran out of money? This difficulty will quickly be taken care of. The Reserve Bank of India (RBI) has just lately determined to impose penalties on banks if ATMs fail to replenish forex notes. The principal goal behind the scheme is to make sure that adequate money is out there for the general public by ATMs.

Shruti Khandare, Chief Marketing Officer, MyFundBazaar, mentioned that whereas the on-ground implementation of RBI is the important thing to environment friendly cash-forecasting, however the penalty strategy alone is implausible to resolve the problem of ATM money accessibility.

“The penalty approach alone is implausible to resolve the issue of ATM cash accessibility, despite the objective behind the RBI proposition being purposeful. While the on-ground implementation of RBI is the key for efficient cash-forecasting & prompt availability of currency to upload ATMs on time with sufficient amount of money, what really needs to be addressed is the fundamental cause of every ATM running dry – sub optimal cash-forecasting & the delay in the availability of ATM-fit currency,” mentioned Shruti Khandare.

Sonali Kulkarni, Lead – Financial Services, Accenture in India mentioned that originally banks and ATM managed service suppliers might expertise some teething troubles however this may guarantee enough money obtainable to the general public

“While banks and ATM managed service suppliers might expertise some teething troubles in adapting to the brand new RBI guideline on non-replenishment of ATMs, the rule will guarantee uninterrupted and enough money availability to the general public.”

She additional added that banks might want to undertake a data-driven strategy and leverage machine-learning powered predictive analytics to forecast money administration at ATMs and thereby, handle liquidity extra successfully

“During the pandemic, a large number of banks in India discovered the merits of data and AI-driven risk discovery and mitigation. Today, we see banks investing in advanced analytics that enables early warnings on market and credit risk. We see the same scenario being mirrored in ATM operations management. Banks will need to adopt a data-driven approach and leverage machine-learning powered predictive analytics to forecast cash management at ATMs and thereby, manage liquidity more effectively,” she mentioned.

RBI to Banks

The newly launched initiative underneath the ‘Scheme of Penalty for non-replenishment of ATMs’, will come into impact from 1 October. RBI additionally requested the banks to make sure there aren’t any cash-out conditions. “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 mentioned in a round.

₹10,000 penalty for non-availability of money at ATMs

The RBI will begin imposing penalties on banks in case the ATMs stay out-of-cash for a complete interval of 10 hours in a month from October 1, 2021, onwards. As regards the quantum of penalty, the central financial institution mentioned “cash-out at any ATM of more than ten hours in a month” will entice a flat penalty of ₹10,000 per ATM.

In the case of White Label ATMs (WLAs), the penalty could be charged to the financial institution, which is assembly the money requirement of that specific WLA.

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