RBI sends guidelines on cash management to banks

The Reserve Bank of India has sent a notification to all Public Sector Banks / Private Sector Banks / Foreign Banks / Regional Rural Banks / Primary (Urban) Co-operative Banks / State Co-operative Banks / District Central Co-operative Banks, detailing the standards required for Cash Management activities of the banks when engaging the Service Provider and its sub-contractor. The letter dated April 6, also specified that banks had to hire only companies which have a minimum fleet size of 300 specifically fabricated cash vans, either owned or leased.

The notification goes into details of what the van carrying the cash should be like including it having tubeless tyres and special compartments, individually locked.

The notification also said that each cash van should be a specially designed and fabricated Light Commercial Vehicle (LCV) having separate passenger and cash compartments, with a CCTV covering both compartments. The notification says that no cash van can move without armed guards with valid gun licenses and with weapons in a functional condition along.

RBI also says that each cash van should be GPS enabled and monitored live with geo-fencing mapping with the additional indication of the nearest police station in the corridor for emergency. The RBI also reiterated its earlier decision that ATMs would be replenished only during day time and there would be no movement of cash vans after that.

The notification also instructs strict background checks of the employees including police verification of at least the last two addresses. Such verification should be updated periodically and shared on a common database at industry level. The SRO can play a proactive role in creating a common data base for the industry. In case of dismissal of an employee, the CIT / CRA concerned should immediately inform the police with details.

The notification says that critical information like customer account data should be kept highly secure. Access to the switch server should be restricted to banks. Interfaces where a bank gives access to the bank’s internal server to the service provider or its subcontractor should be limited to relevant information and secured.

The 15 point notification ensures that banks wishing to move cash around to ATMs will have to adhere to the stringent methodology specified by the RBI.