ATM New Rule 2021, Can't Withdraw Cash as ATM has no money? know more.
Welcome back to our informative blog site knowing steps360 with a New IMP News. Reserve Bank of India (RBI) has recently introduced a scheme to impose penalties on banks if ATMs remain out-of-cash. The inconvenience caused to the public due to the non-availability of cash in ATMs led the central bank to take this decision. “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 said in a circular.
What is the ‘Scheme of Penalty’ for non-replenishment of ATMs?
The central bank of India 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. RBI has recently reviewed the downtime of ATMs due to cash-outs. “ATM operations affected by cash-outs lead to non-availability of cash and cause avoidable inconvenience to the members of the public," the banking regulator observed.
So, RBI has asked the banks or White Label ATM Operators (WLAOs) to strengthen their systems. The banks must monitor the availability of cash in ATMs and ensure timely replenishment to avoid cash-outs.
Ensure Money at ATMs or Face Penalty: RBI to Banks
If the bank fails to ensure timely availability of cash at ATMs, it will face a lumpsum penalty. 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, RBI said.
Rs 10,000 Penalty for Non-Availability of Cash at ATMs
If ATMs fail to dispense cash for more than 10 hours in a month, the bank will face a penalty of Rs 10,000 per ATM. For White Label ATMs failing to ensure the cash at ATMs, the penalty would be charged to the bank, which is meeting the cash requirement of that particular operator, the central bank said. The bank can later recover the penalty from the WLA operator.
When will the Penalty be Applicable?
On condition for counting instances of cash-outs in an ATM, the RBI said it would come into play ‘when the customer is not able to withdraw cash due to non-availability of cash in a particular ATM’. The new rule will be effective from October.
How the ‘Scheme of Penalty’ will work
The lenders have to submit a system-generated statement on the downtime of ATMs due to non-replenishment of cash to the issue department of RBI under whose jurisdiction these ATMs are located, the regulator said.
In the case of White Label ATM Operators, the banks which are meeting their cash requirement, need to furnish a separate statement on behalf of the operator when ATM runs dry. Such statements shall be submitted every month within five days of the following month. Example: The first such statement for the month of October 2021 shall be submitted on or before November 05, 2021, to the issue department, RBI said.
Who will Impose the Penalty?
The ‘Scheme of Penalty’ will be administered by issue departments of the regional offices of the Bank. The officer-in-charge of the issue department of the Regional Office under whose jurisdiction the ATMs are located can impose penalties on banks and ATMs. The lenders will have an option to appeal against the decision within one month from the date of imposition of penalty.
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