Saturday, 15 June 2013

Guidelines for Physical Security of ATMs in India

I am not alone in wondering whether there are any guidelines for physical security of ATMs in India. The pathetic state of ATM security at present appears to suggest that either there are no guidelines, or any guidelines that are there are being violated by most of the banks without any fear of regulatory / supervisory action by Reserve Bank of India. I have tried to find out official information from Reserve Bank of India in this regard through RTI applications but did not get any such guidelines (Click here for details). Finally a helpful anonymous banker somewhere in India has mailed me a copy of a letter dated 4th April, 2012 written by National Payments Corporation of India (NPCI) to all its member banks asking them to implement measures for physical security of ATMs in India. In this letter, NPCI mentioned that a few ATMs of a member bank got compromised during January 2012. It was gathered that none of these ATMs had adequate physical security arrangements. Thus, to identify the control gaps in ATM security, NPCI had formed a "Task Force on ATM Security" with Industry Experts to prepare the report on best practices on ATM security. Read on...

ATM Security Task Force Report Covering Letter by National Payments Corporation of India
The report was submitted by the Task Force before April 24, 2012 but no date of submission is mentioned. NPCI further mentioned in the letter that the report "has two sets of recommendations - "Mandatory Recommendations" and "Good to have Recommendations"... These recommendations would set the stage for protecting the industry proactively against the frauds and boost the end customer confidence in the Banking Industry. The Task Force Report is already submitted to RBI for consideration. While RBI would issue directions in due course, member banks are requested to assess the gaps in their system and take action as they deem appropriate."

What is written above means that the report of the Task Force on ATM Security is with Reserve Bank of India since before April 24, 2012. At the time of writing this article, more than a year has already passed since then. Hopefully, India will see these "directions" from RBI sometime in the next decade. Till then, everything is at the mercy of your banks. I personally have not seen any change in the ATM security environment since April 2012. That means, the member banks of NPCI have not taken the Task Force Report seriously. I hope someone in Reserve Bank of India reads this article.

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All information given in this blog is obtained from sources in the public domain, RTI applications, discussions with bankers, bank customers in India and also with some employees of Reserve Bank of India having knowledge of the working of various Offices of Banking Ombudsman in India. All information in this blog is presented on a best effort basis and is not claimed to be complete information on any of the subjects covered in this blog. Use of any information given in this blog is purely voluntary on the part of the readers. Author of this blog does not assume any responsibility for any action of the readers related to any matter discussed in this blog or any consequences thereof. Readers of this blog are advised to consult a legal practitioner before taking any action related to any matter discussed in this blog.