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Indian CITs say RBI rules raise 'sudden uncertainty over their very existence'

September 25, 2018

Cash-in-transit firms in India have said that new criteria set by the Reserve Bank of India could very well put them out of business.

At least a dozen carriers have said that it will be impossible to meet new RBI rules set to take effect in March that will require them to maintain at least 1 billion rupees ($14.5 million) in cash reserves and a minimum of 300 purpose-built vehicles

According to a report by Times of India, only two private CIT firms in Kolkata have the requisite number of cash vans and even they do not have the cash reserves required.

Banks have already begun turning away tenders from CITs that do not meet the RBI criteria, and are worried that the new rules will result in a CIT market controlled by only a few vendors, the report said.

A number of CITs have filed a petition with the Calcutta High Court due to the "sudden uncertainty over their very existence," the report said.

"We have flagged this issue with the RBI and the center. This could spell doom for the private security industry here and render over 12 agencies, their subcontractors and roughly 10,000 people jobless," Satnam Singh Ahluwalia, general secretary of the Central Association of Private Security Industry in Bengal, told the Times.