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Last Updated : Jul 02, 2020 10:14 AM IST | Source: Moneycontrol.com

RBI pushes banks to upgrade ATM security norms: Report

The central bank, which expected the upgrades to be done in a phased manner, is asking banks for updates on the progress.

The Reserve Bank of India (RBI) has asked banks to speed up automated teller machine (ATM ) upgrades in accordance with the norms issued by the central bank over the last two years. These include installing digital locks, new cassette-swapping system, ATM operating system upgrade, and stepping up of electronic surveillance at ATMs. The deadline for implementing these norms is drawing close.

Banks have, however, said they did not have sufficient remuneration for the upgrades and that their cost analysis found that expenses would be higher than the RBI’s estimate, sources told The Economic Times.

For example, RBI puts cassette swap estimates at Rs 160 crore but industry pegs it at Rs 3,000 crore.

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The cassette swap could raise banks’ expenses and indirectly hit interchange and customer fees by 15 percent, a report by an RBI-appointed panel led by VG Kannan, who is the head of the Indian Banks’ Association, has said.

The central bank, which expected the upgrade to be done in a phased manner, and was asking banks for updates,  sources added.

Moneycontrol could not independently verify the report.

At present less than 5 percent of ATMs have been upgraded, a source told the paper, adding, “Most acquirer banks who operate ATMs are waiting for a hike in interchange rates or some compensation mechanism to cover for these costs.”

A banker told the paper that ATM providers are bearing the cost of upgrades and that they have taken up the process “on priority” following communication from the regulator.

ATM operators confirmed that ICICI Bank, Axis Bank and HDFC Bank have completed e-surveillance compliance, while J&K Bank, Punjab and Sindh Bank, Uco Bank, Cosmos Bank and Federal Bank have now started the upgrade process.

RBI did not respond to queries, as per the report.
First Published on Jul 2, 2020 10:14 am
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