Banks, cash management firms to talk ATM security

RBI recently asked IBA to look into critical issues of outsourcing of cash management services as instances of looting of ATM cash vans were increasing

Representatives from cash management service providers such as Brinks, SIS Prosecur and CMS are likely to meet a working group, set up by bankers, on outsourcing of the service on Wednesday. These companies are primarily responsible for filling automatic teller machines (ATMs) with cash.

The working group was formed by the Indian Banks’ Association (IBA) after the Reserve Bank of India (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.

With fast expansion of ATMs across the country, 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.

“Then, there is an issue of gun licences. In absence of a clear-cut policy to secure gun licences for our trained guards, cash management companies have to hire men with licences, who are often without any security and guarding training,” said Rituraj Sinha, managing director, SIS Prosegur.

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.

“You can’t just take out the human element from ATM security. In many incidents, we have seen guards coming to the rescue of customers saving people from being killed even if they have been robbed of cash. There is a need for uniform and comprehensive guidelines for ATM transaction and security,” said Sinha.

Currently, private security agencies, servicing approximately 85,000 ATM kiosks, move about Rs 15,000 crore per day.

There are 1.27 lakh ATM kiosks in the country and 62,000 are offsite, which are not attached to bank buildings and about 55 per cent of these do not have guards, according to industry sources.