oppn parties Cash Management Agencies Should Stop Scaremongering

News Snippets

  • Kapil Sibal leaves Congress, fills nomination for Rajya Sabha with SPs backing
  • RBI bans 5 NBFCs as it cracks down on e-lending platforms
  • Hindustan Motors to tie-up with Peugeot to bring out a redesigned version of the iconic Ambassador
  • GST Council to defer rate rejig due to inflation
  • Centre to sell 29.5% in Hindustan Zinc at an expected price of Rs 38000cr
  • Stocks remain negative on Wednesday: Sensex loses 303 points to 53749 and Nifty 99 to 16025
  • IPL: RCB beat LSG by 14 runs and end their dream run. Rajat Patidar scores a brilliant 112. RCB will take on RR to decide who goes through to the finals
  • Delhi Additional district judge Nikhil Chopra says there is no legal right for people seeking to worship deity inside Qutab Minar, says it survived 800 years without worship so "let it survive like that"
  • Punjab chief minister Bhagwant Mann sacks state health minister Vijay Singla over corruption charges. Singla was later arrested by the ACB
  • Protestors burn the house of Andhra minister P Viswaroop and MLA Satish Kumar over renaming of Konaseema district as B R Amberdkar Konaseema
  • Gyanvapi: Varanasi district judge decides to first hear the 'maintainability' plea filed by mosque management
  • Delhivery and Venus Pipes shares list at premium of 10% and 8.7% respectively even when market sentiment was down
  • In a bid to cool edible oil prices, Centre allows duty-free imports of 20 lakh tonnes each of crude sunflower oil and crude palm oil per annum this year and next
  • Centre caps sugar exports to ensure availability of stocks in the domestic markets to cool prices
  • Stock markets get the jitters as RBI signals rate hike and government moves in to control inflation: Sensex tumbles by 236 points to 54052 and Nifty goes down by 89 points to 16125
Yasin Malik of JKLF gets two life terms in terror funding case /////// Kashmir TV artist killed and her nephew injured in a terror attack in Hushroo in Budgam district
oppn parties
Cash Management Agencies Should Stop Scaremongering

By Sunil Garodia
First publised on 2018-11-23 13:26:11

About the Author

Sunil Garodia Editor-in-Chief of indiacommentary.com. Current Affairs analyst and political commentator.
The Automated Teller Machines, cash management and cash logistics work has largely been outsourced by Indian banks. Given this situation, the RBI was rightly worried about the competence and efficacy of the agencies carrying out this work for the banks. It has been studying this for the last couple of years through two inter-agency committees and has now recommended stringent guidelines for them, including enhancing of standards by the said agencies.

Instead of taking this up as a challenge and meeting these standards to update themselves to standards being followed across the globe, these agencies have started indulging in scaremongering. Hence, the public is being told that more than half the ATMs will shut down in the very near future. To a public used to randomly withdrawing cash from the omnipresent ATMs, this is a very worrisome prospect. At last count, despite digital banking and mobile payment apps, Indians withdrew nearly Rs 2.70 lakh crore a month from ATMs. Banks, too, encourage customers to use ATMs for both withdrawal and deposit instead of visiting branches. Given the paucity of bank branches, people are naturally worried for their cash requirements if such a large number of ATMs are shut down.

Cash logistics agencies handle nearly Rs 15000 crore cash on a daily basis. The RBI, in its new set of guidelines for these agencies, has decreed that the net worth of the service provider and their sub-contractors should not be less than Rs 100 crore. It has also specified that these agencies should have an all-India fleet of at least 300 specially fabricated cash vans with armed guards for moving cash. The Cash Logistics Association, while agreeing that these guidelines will improve standards to global levels, improve efficiency and reduce fraud, are worried that most of agencies will not be able to meet the requirements and it would increase costs in the short term.

But that is not for the RBI to see. It has talked to all stakeholders through its high-level committees constituted especially for this purpose and has come out with these guidelines. These guidelines are not arbitrary. India is growing at a fast pace. Given the propensity of Indians to spend in cash, the logistics industry is also expected to grow at a fast pace. If global standards are not enforced now, there will be a lot of problems later on. The industry needs big players who can adhere to these standards. It can also do with a few mergers and acquisitions. Since fraudsters are taking advantage of improving technology to get smarter by the day, the industry must also improve standards to stay a step ahead of them. After all, no one, least of all the RBI, can be expected to allow them a free run in handling such huge amounts of public money.