New Delhi: There may be cash crunch at ATMs this festival season on account of shortage of armed staff in private security agencies that provide logistics services to banks.
The number of armed security guards in cash handling agencies have come down to one-third of what it was 6 months ago hitting the logistics operations, as per an industry estimate.
Besides, many of them are expected to go on leave during the festivals - Navratri, Dussehra, Diwali and so on - adding to the woes of cash logistics firms.
A number of ATMs are now being loaded with cash every fifth day, instead of every two days earlier, say industry officials.
"There could be cash crunch in ATMs, due to shortage of armed guards at various companies. The increase in loading time to once every 5 days is an indicator to that." said an official at a logistics company.
However, according to a public sector bank official, lenders are taking adequate measures to feed in extra cash in ATMs taking into account additional demand for money during the festival season.
About Rs 15,000 crore cash is moved on behalf of banks every day, according to Cash Logistics Association.
The fall in armed security guards is because of various reasons including the fact that police in many states have raised objections on the issue, saying that private arm licence cannot be used for purpose other than defined by the law, said the association.
This has lead to staff crunch with cash logistics firms, which don't get a formal licence to operate armed services for cash logistics.
Currently, cash van security involves people who have private licence for carrying arms and are mostly from UP, Bihar and Rajasthan.
According to cash logistics firm SIS Prosegur's Managing Director Rituraj Sinha, discussions between government and banks have happened on the issue many times but the issue remain unresolved.
"We may have to stop the cash logistics services if the issue is not sorted soon. Looting incidences have stalled fear among cash logistics companies," he said.
Cash van looting incidents have gone up to one incident per month in 2012-13, compared to just one in three months in 2011-12, he said.
Cash Logistics Association's Secretary General N S G Rao is of the view that the Indian Arms Act 1959 should be relaxed to suit the requirements in bigger cities.
There are over 1 lakh ATMs across the country. Of these, nearly one third are in rural and semi-urban areas.
First Published: Sunday, October 06, 2013, 20:41