RBI to take stock of cash being handled by ATM operator AGS Transact

RBI to take stock of cash being handled by ATM operator AGS Transact

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26 Aug, 2025 12:21

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The Reserve Bank of India has called a meeting this week with banks that have used the services of AGS Transact Technologies, a company that handles the cash loaded into ATMs. The main agenda for the meeting, according to sources, is to obtain an assessment of cash being handled by AGS, some of which banks said they are unable to trace.

While there is no official estimate available to ascertain the amount of money which has been untraceable since mid-January -- when AGS’ problems came into the public domain -- banks who use the ATM services of AGS Transact say the sum could total to about Rs 1,000-1,500 crore.

Emails sent to RBI in this regard remained unanswered till publishing the article.

"The company strongly refutes these unfounded allegations of unaccounted funds and misappropriation. We are in the process of reconciling cash across our ATMs and vaults and handing it over to the respective banks in line with established industry procedures,” said a spokesperson for AGS Transact.

While cash that is loaded and locked into ATM cassettes cannot be accessed by outsiders, cash being transferred from AGS Transact’s vault to ATMs could have been susceptible to mishandling, as per the sources.

This is because less than 40 percent of ATMs have adopted a new regulation on cassette swaps, which should have been implemented from April last year. As per the new mechanism applicable for cash handling, from the time of loading cash from the vault to placing it in the cassette, the person operating the cash-handling hardware will not be able to access the cash without a two-factor authentication system involving the bank. This would significantly reduce human intervention in the cash management process.

“Banks are yet to adopt new norms on cassettes swaps. The contentious issue is who will bear the incremental cost of cassette swaps. With no decision on this, cash handling in ATM operations is still vulnerable to human interference,” said a banker who will take part in the meeting with RBI.

Nearly 30,000 - 35,000 ATMs, largely handled by AGS Transact, have not been stocked properly since February this year, as per media reports. AGS Transact caters to at least 16 banks, including State Bank of India, HDFC Bank, ICICI Bank, Bank of India, Union Bank of India and Axis Bank.

SBI and ICICI Bank are no longer using the company’s services, as per the sources cited. “Many are still in the process of migration to CMS Info Systems or Hitachi,” said a source with knowledge of the situation.

The meeting with RBI is expected to take stock of this migration process and ascertain ways to see if the ‘untraceable’ cash can be brought back into the system. With about Rs 38 crore of unpaid dues to vendors, Maxwell Aircon, an operational creditor to AGS Transact has initiated insolvency proceedings against the company. As the future of ASG Transact is becoming increasingly bleak with insolvency proceedings being initiated, sources say a fast remedy is needed for the issue of empty ATMs plaguing the banking industry since early this year.