Thread by @finshots

Why the RBI is penalizing banks if their #ATM runs out of cash.

A thread 🧵(1/11)

How many times have you found your nearest ATM out of cash?

Multiple times, perhaps? Well, it looks like the RBI heard you. (2/11)

In a recent notification to banks, the RBI essentially said-- "Look, issuing currency notes is our thing. But getting that money out to the public through the massive network of ATMs is on you guys..." (3/11)

...And if ATMs are unable to dispense that cash, it's going to be a cause of inconvenience to the public. So it's perhaps time you address that."

(Except, the RBI obviously used more legalese words)(4/11)

The whole ‘ATMs running low on cash’ problem stems from our cash behavior - one of the umpteen things the pandemic distorted.

To avoid frequenting ATMs over and over again, people started hoarding cash for the regular needs and contingencies. (5/11)

The average size of withdrawals went up by almost 20%. Everybody wanted more cash - even as online transactions grew by a massive 80% over 2020. (6/11)

Starting October 1, ATMs that are cash-out for more than 10 hours a month will be slapped a Rs. 10,000 penalty on the ATM.

Let’s get this straight - the burden is on the bank that’s running this ATM. (7/11)

And that rule kind of changes in the case of White Label ATM Operators (WLAOs).

Note that this bunch of ATMs isn’t run by a bank - instead, there’s a non-bank company managing it, in areas that are financially underserved. (8/11)

Say if a customer walks into a WLA to find it cash-out, guess who’s going to pay the penalty? The sponsoring bank, which is supposed to make sure they're stocked up with cash.
(9/11)

So as it turns out, banks will now have to pay a price for being out of cash.

And you probably won’t have to walk away from the ATM empty-handed anymore.

Let us know your thoughts. (10/11)

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