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New requirements for net worth, security have India's FIs, CITs, ATM operators running scared

July 23, 2018

The Reserve Bank of India has given bankers a new set of rules for the engagement of cash management service providers. And in doing so, RBI has also given them a killer headache.

Starting in March, cash services providers will be required to maintain a net worth of 1 billion rupees ($14.5 million) at all times, according to a report by The Hindu Business Line.

Bankers are worried that this high threshold will result in a significant contraction among cash management companies, especially independent ATM deployers.

The resulting shortage of providers will drive up ATM costs and disrupt ATM operations, one banker told the publication. India's banks have asked RBI to allow more time for service providers to meet the net worth requirement.

New CIT provider rules are also a source of consternation. RBI is requiring a minimum number of 300 vehicles and has specified that they must meet strict criteria, including:

• GPS-enablement
• tubeless tires
• separate passenger and cash compartments
• CCTV coverage of both compartments
• two armed security guard
• special vaults

CIT companies have said that costs could balloon by up to 40 percent. They have also asked for more time to implement the rules, the report said.