Banks To Now Be Held Accountable For Cash Shortage In ATMs; RBI Issues Circular Warning Of Penalties

Customers line up next to an ATM in Siliguri: Photo credit: DIPTENDU DUTTA/AFP/GettyImages

Banks across the nation may end up paying penalties should their ATMs run dry, thus failing to dispense cash for more than three hours and creating inconvenience for the customers, reports DNA.

The Reserve Bank of India (RBI) has already issued a circular to all the banks to this tune, claimed the report.

Despite remonetisation by the government, ATMs across several small cities and rural areas are said to have been running out of cash for several hours., thus resulting in big queues.

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“The sensors installed in the ATMs alert the banks about the depletion of cash. But sometimes due to the lackadaisical attitude of the staff, cash re-filling is not done immediately. In rural areas, people are forced to go to banking correspondents in such a situation, and they end up paying higher charges for each transaction," said the source.

The RBI had set up a committee headed by Indian Banks' Association (IBA) chief executive officer V G Kannan to look into the matter.

The central bank, in 2018, found the cash withdrawal rate to be much higher than deposits in many states, leading to a severe cash crunch. This was more prevalent in states like Bihar, Telangana, Andhra, MP, UP, Rajasthan, Karnataka and Maharashtra.

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