In August 2021, Reserve Bank of India (RBI) introduced a scheme named ‘Scheme of Penalty for non-replenishment of ATMs’ to levy monetary charges/Penalty on Banks & White Label ATM Operators (WLAOs) for cash-out (i.e. the non-availability of cash) in Automated Teller Machines (ATMs) due to non-replenishment of cash.
- Objective: To ensure sufficient cash availability in the ATMs for public needs and overcome the inconvenience caused due to cash-outs in the ATM.
- Effective date: The Scheme would be effective from October 01, 2021.
i.RBI will issue a penalty of Rs 10,000 per ATM/ WLAs for banks for Cash-out for more than 10 hours in a month.
ii.For WLAs, the penalty would be charged to the bank which is meeting the cash requirement of that particular WLA (The bank may recover the penalty from the WLA operator).
i.Banks: RBI has directed the banks to submit system-generated statements on the downtime of ATMs due to non- replenishment of cash to the Issue Department of RBI under which jurisdiction the ATMs are located.
ii.WLAO: The banks that are meeting the cash requirement of White Label ATM Operators (WLAOs) are also mandated to provide a separate statement on cash-out of WLAO’s ATMs.
iii.The statements should be submitted every month within five days of the following month i.e., the statement for the month of October 2021 should be submitted on or before November 05, 2021.
c.The penalty scheme will make the banks/WLAOs form a robust system for monitoring the cash availability in ATMs and ensure timely replenishment to avoid cash-outs.
RBI Imposed 10 lakh Penalty on Gadhinglaj Urban Co-operative Bank
i.RBI imposed a monetary penalty of Rs 10 lakh on Gadhinglaj Urban Co-operative Bank Limited, Gadhinglaj, Maharashtra by exercising the powers vested in RBI under the provisions of Section 47 A (1) (c) read with Section 46 (4) (i) and Section 56 of the Act.
- The Bank was penalized for providing advanced loan to a director of the bank, given fresh loans to the real estate sector in violation of the operational instructions issued by RBI under the provisions of the Act, extended individual unsecured advances of more than ₹5.00 lakh and not implemented the system of periodic review of risk categorization of accounts which is against the Supervisory action framework issued by RBI under section 35 A and section 36 read with section 56 of the Banking Regulation Act, 1949 (the Act); Exposure Norms and Statutory Other Restrictions- UCBs and Know Your Customers (KYC).
ii.RBI also imposed a penalty of Rs 2 lakh each on Malkapur Urban Cooperative Bank Limited, Malkapur, Maharashtra and Dr Babasaheb Ambedkar Urban Co-operative Bank Limited, Nagpur, Maharashtra for contravention of certain RBI norms.
Recent Related News:
The Reserve Bank of India (RBI) has extended the implementation deadline for banks to use only lockable cassettes, which could be swapped at the time of cash replenishment (filling up cash) in ATMs till March 2022.
About Reserve Bank of India (RBI):
Established – 1st April 1935
Headquarters– Mumbai, Maharashtra
Governor– Shaktikanta Das
Deputy Governors – Mahesh Kumar Jain, Michael Debabrata Patra, M. Rajeshwar Rao, T. Rabi Sankar