Need cash in India ? Chances are you will have to try more than one ATM before you hold a crisp note.

A survey of 4000 ATMs across the country conducted by the Reserve Bank of India (RBI), the regulating body for the banking system, revealed that a third of machines do not work. A significant number of the ATMs surveyed were not equipped with disability access facilities, said the Deputy Governor S. Mundra in a speech on Monday. The sample size represented all the nation's geographical regions and bank categories fairly. RBI has promised to take “necessary supervisory action.”

ATM machines first made it to India in 1987 and digital banking is seeing a surge in popularity. According to RBI statistics from 2014 there are 19 million credit cards and 441 million debit cards being used in India. 

The speech was delivered to an audience of compliance officers and other members of the banking community.See also: The Regulations That Govern Banking in India.

Mundra brought up the need for a robust mechanism to prevent incidents of electronic and mobile banking fraud and said the RBI will be looking into limiting the liability of customers by issuing regulatory directions. Money "muling", the use of the inactive accounts for the transfer of large funds by third parties conducting illegal activities, has been a problem in the absence of sufficient monitoring. 

Indian banks have been charging a fee for savings accounts without enough funds in them--which is a violation of the banking rules. “It is in this context that we had to reiterate our instructions on stopping imposition of such charges leading to a negative balance in savings accounts,” said Mundra. He also stressed the need for a “unified payments interface” which will make it easier for customers to switch banks and promote competition. See also: The Ins and Outs of Bank Fees.


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