RBI accepts plea for penalty waiver

RBI accepts plea for penalty waiver

Topic: Economy

Context: The RBI has accepted the stakeholders’ (Banks, White Label ATM Operators & managed service providers) plea to waive penalty at times ATMs cannot be replenished with cash due to unforeseen circumstances.

Concept:

• According to the RBI’s 2021 circular on ‘Monitoring the availability of cash at ATMs’, a flat penalty of Rs. 10,000 per ATM would be imposed on an ATM operator if an ATM is cash-out for more than 10 hours in a month. In 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 reason behind its issuance is not to cause inconvenience to the public due to cash-outs at ATM.
• Challenges:
  • Movement of cash for banks and ATMs prohibit loading of cash after a certain time as per 2018 MHA guidelines.
  • Industry players would have weeded out the ATMs that were incurring losses due to penalties.
  • Deployment of new ATMs in rural and semi-urban areas would have come to a
  • Logistics infrastructure challenges: the very small aperture terminals for data communication not working, the machine developing a snag, power supply issues etc.
• With the RBI’s move for waiver of penalty, ATM operators are expected to expand their networks with renewed vigour.