K Ram Kumar

An acute shortage of gunmen, due to government restrictions on issuance of gun licence, has become a cause for concern for banks and cash replenishment agencies (CRAs) as the Reserve Bank of India (RBI) has directed that cash movement should be done only on four-wheelers with two armed guards.

Internal guidelines

A majority of the banks have been following internal guidelines for cash movement for ATM replenishment. But the RBI has stipulated that cash should be transported only in owned/leased security cash vans of the service provider (CRA), or its first level sub-contractors, and that no cash van should move without (two) armed guards.

As per banks’ internal guidelines, cash up to ₹15 lakh is usually carried on body with complete insurance cover. A four-wheeler (without armed guard) with complete insurance cover is deployed to carry cash between ₹15 lakh and ₹20 lakh.

A four-wheeler (with one armed guard) with complete insurance cover is deployed to carry cash between ₹20 lakh and ₹50 lakh. Further, a four-wheeler (with two armed guards) with complete insurance cover is deployed to carry cash between ₹50 lakh and₹ 1 crore. Banks have told the central bank that given the government restrictions on issuance of gun licence, there is acute shortage of gunmen at present.

Bankers feel that the inclusion of additional gunmen and providing a list of gunmen to police authorities on a monthly basis seem challenging.

Hence, it is necessary to rationalise the restriction on issuance of gun licence before implementation of the RBI policy. This may be time consuming as the gun licensing policy of the government needs to be modified. Further, in line with insurance policy, banks have suggested to the RBI that the gunmen requirement should be linked with the amount being ferried.

“When there is cash shortage in any of our branches/ATMs, we rush cash from the nearest branch. Our officials engage either the bank’s own vehicle or hire a cab and move the cash (₹10-15 lakh), taking ample precaution. We have not faced any problem so far.

“RBI’s new stipulation on cash movement will increase the cost of physical and security infrastructure. We will have no choice but to pass it on to customers by way of increase in service charges,” said a banker. He added that the guidelines on gunmen requirement need to be reviewed.