The Reserve Bank of India has extended the timeline for implementation of cassette swap in all ATMs by banks by one year till March 31, 2023.

This is second extension of timeline that the central bank has given to banks.

The extension of deadline for implementation of cassette swap in ATMs comes following representations RBI received from various banks and Indian Banks’ Association expressing difficulties in meeting the timeline. 

In July 2021, RBI had advised banks to consider using lockable cassettes in their ATMs which shall be swapped at the time of cash replenishment.

The same was advised to be implemented in a phased manner covering at least one third ATMs operated by the banks every year, such that all ATMs achieve cassette swap by March 31, 2021. The RBI later extended the deadline to March 31, 2022.

Banks have cited various constraints, including availability of adequate number of cassettes, readiness of cash replenishment agencies to deal with cassette swap and costs, for the slow progress in implementing cassette swap in ATMs.

At a meeting with banks about two months back, regulatory officials raised the issue of lacklustre progress in implementing cassette swap, despite being given a one-year breather.

According to AGS Transact Technologies’ January 2022 Red Herring Prospectus, as of August 2021, only one per cent of ATMs have implemented the cassette swap feature in their ATM, and it is anticipated that only 50 per cent of the ATMs will be upgraded to cassette swap by the end of financial year 2022.

Three sets

As per estimates, each ATM will require three sets of five cassettes — one set in the ATM, one in transit and another at branch/ cash-in-transit (CIT) company (ready for loading next day). 

The cost of each cassette is in the range of ₹15,000 to ₹20,000. As of December-end 2021, there were 2.41 lakh ATMs in the country. Of these, 2.11 lakh were bank-owned ATMs and 30,000 were owned by White Label ATM Operators.

Based on the recommendations of the Committee on Currency Movement, the RBI, in April 2018, had advised that banks may consider using lockable cassettes in their ATMs, which will be swapped at the time of cash replenishment. This is aimed at mitigating risks involved in open cash replenishment/ top-up. 

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