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Meeting on cash management service

MtrollyRepresentatives from cash management service providers are likely to meet a working group, set up by bankers, on outsourcing of the service. The working group was formed by the Indian Banks’ Association (IBA) after RBI had asked banks to look into critical issues of outsourcing of cash management services, especially with risks involved with such activity, as instances of looting of cash vans were on the rise. The working group, headed by IBA deputy chief executive K Unnikrishnan, has representatives from both public and private banks, including the State Bank of India (SBI) and ICICI Bank. The cash management service companies are facing challenges to keep up with the demand due to a dearth of armed security guards, who mandatorily need to be in the cash vans. According to industry sources, about 2,500 new ATMs come up every month, and many of these cannot be refilled with cash on time. Supply of armed guards is one of the key issues as the Private Security Agencies (Regulation) Act, which was formulated in 2005 to define norms for this sector, does not have any clause to permit licences for arms. However, the 1959 Arms Act allows individual applicants to hold arms licences. While there is a proposal to partially shut down ATMs with low transactions at night as a security measure, the working group is also considering e-surveillance as the best alternative, where the kiosk is monitored through a CCTV. Currently, private security agencies, servicing approximately 85,000 ATM kiosks, move about Rs 15,000 crore per day.

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