RBI Sorts out Cashless ATMs Issue
The central bank intervened after receiving reports that many banks were hoarding cash
Mumbai: The Reserve Bank of India had to step in to ensure that banks distributed sufficient money through their ATM network after several complaints of cashless ATMs came to their attention. This was despite the fact that sufficient funds were allotted to the respective bank branches to be distributed through ATMs. After many companies, which manage the 2 lakh strong ATM network of the country, started complaining about banks hoarding cash, the RBI started seeking detailed reports from these companies on how much cash was being requested by each bank and how much was being released by banks.
“RBI intervened after banks were found hoarding cash. They were asking reports from banks and all of the other stakeholders,” said Anand Garollu, India services general manager, NCR Corporation, which is one of the largest makers and managers of the cash dispenser in the country.
Garollu said that since the company is re- sponsible for loading cash into ATMs they know the demand and are responsible for raising indents with the respective banks on how much cash is needed to replenish ATMs. “We raise the indent and are aware of how much we are receiving from banks against the indents. We send reports daily to the RBI,” said Garollu.
Explaining the root cause of the problem, ATM industry insiders said that after 86% of the currency was sucked out post-demoneti- sation, banks were allotted lesser cash from their currency chests because of issues around printing of new notes, which forced them to hoard whatever was available to cater to their own customers at their branches. “Cash once released in the ATM network could be accessed by other bank customers as well. This had caused them to hold on to the cash they got,” said top executives of cash logistics companies who are involved in ATM refilling.