RBI Circular on Monitoring of Availability of Cash in ATMs

The RBI, by a circular dated August 10, 2021 (“RBI ATM Cash-Out Circular”), has required banks and
White Label ATM operators to strengthen their systems and mechanisms to monitor availability of cash in
ATMs, and ensure timely replenishment to avoid cash-outs, i.e. when a customer is unable to withdraw cash due
to non-availability of cash in a particular ATM. The RBI ATM Cash-out Circular has prescribed a scheme of
penalty for non-replenishment of ATMs with effect from October 1, 2021. The RBI ATM Cash-out Circular
requires banks to issue system generated statements in respect of downtime of ATMs on a monthly basis.
Further, cash-out at any ATM of more than 10 hours in a month will attract a flat penalty of 210,000 per ATM.
In the case of White Label ATM operators, the penalty would be charged to the bank which is meeting the cash
requirements of that particular White Label ATM. The bank, may, at its discretion, recover the penalty from the
White Label ATM Operator. Further, banks/White Label ATM operators are required to appoint a nodal
branch/official to send the RBI, a consolidated data report for cash-out in case the total hours an ATM did not
function due to a cash-out was more than 10 hours in a month. However, penalty may be waived where cash-out
is due to unforeseeable/extraordinary circumstances which are beyond the control of the bank/White Label
ATM operator. See also “Risk Factors - The industries in which we operate are highly regulated by the Reserve
Bank of India. Implementation of new regulations or changes to existing laws and regulations regarding our
services could have an adverse effect on our business, results of operations, cash flows and financial condition”
on page 30.

RBI Circular on Cash Management Activities of Banks — Standards for Engaging Service Providers and
its Sub-contractors

The RBI, by a circular dated April 6, 2018, has prescribed minimum standards for service providers/ sub-
contractors engaged by banks in cash management logistics. Such minimum standards include, inter alia, a
minimum net worth of 1,000.00 million, a minimum fleet size of 300 specifically fabricated cash vans (owned
or leased) with separate cash and passenger compartments. Further, every cash van must adhere to specifications
such as GPS enabled monitoring, geo-fencing mapping and emergency indication of the nearest police station,
and must have two custodians and two armed security guards besides the driver. Additionally, stipulations are
made regarding the training of staff, the premises to be utilized for cash processing/ handling and vaulting.
Further, the circular states that access to the switch server should be restricted to banks. Any interface where a
bank gives the service provider or its sub-contractor access to the bank’s internal server should be limited to
relevant information and secured.

RBI Circular on Cassette-Swaps in ATMs

In order to mitigate the risks involved in open cash replenishment or top-up, the RBI, by a circular dated April
12, 2018 (“RBI ATM Cassette Circular”), has advised banks to consider using lockable cassettes in their
ATMs which will be swapped at the time of cash replenishment. The RBI ATM Cassette Circular required
banks to implement such changes in a phased manner, requiring that at least one third of all ATMs operated by
banks be covered every year, in order to ensure that all ATMs operated by banks may achieve cassette swap by
March 31, 2021. Pursuant to a circular dated July 12, 2021, the RBI has extended the timeline for
implementation of cassette-swap in all ATMs until March 31, 2022. Banks are required to monitor progress and
make the required course corrections at the end of every quarter and report such status to the RBI within seven
days of the end of such quarter.

Incentive Scheme for promotion of RuPay Debit cards and low-value BHIM-UPI transactions (P2M)

The Ministry of Electronics and Information Technology, Government of India (“MeitY”), through a Gazette
notification dated December 17, 2021 (“Gazette Notification”) and the guidelines issued in this regard by the
MeitY and the NPCI, has introduced an incentive scheme for promotion of RuPay Debit cards (“RuPay”) and
low-value BHIP-UPI transactions (up to %2,000) (P2M) (“BHIM-UPI”) whereby acquiring banks will be paid a
percentage of the value of RuPay transactions and BHIM-UPI transactions done in India for a period of one year
w.e.f April 1, 2021 at the rates specified in the Gazette Notification. The banks are required to show at least
10% YOY growth rate in number of RuPay transactions (overall, not restricted to P2M) at the end of the last
quarter of the scheme. The incentive is required to be shared by the acquiring banks with other stakeholders in
accordance with the RuPay Operating Circular No. NPCI/2021-22/RuPay/033.

RBI Circular on storage of actual card data (i.e. Card-on-File) and tokenization

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