Pradeep Kumar Shukla, driver of cash logistics firm SIS, was arrested on charges of making off with his company’s van carrying Rs 22.5 crore on November 26. Though the heist proved short-lived, it put the spotlight on security around cash transporting vehicles. Those in the business say they operate according to their own rules and there are no specific guidelines from authorities. ALOK SINGH and ABHISHEK ANGAD take a look at the business that handles crores and suggestions made to protect money on the move.
Driver Pradeep Kumar Shukla faces action on charges of executing a Rs 22.5-crore heist on November 26, but police want action against his employer, cash logistics firm SIS Prosegur, too for violating norms and have registered an FIR. A top official of the company, however, says there are no specific norms or guidelines for the industry and a few regulations that exist are old and need to be amended to be in tune with requirements now.
For the police, however, the company had not followed basic security. When Shukla started with the cash-laden van, the vehicle had one armed guard. According to the police, the van should have had two gunmen and two custodians. The police also said the company did not follow orders issued periodically to follow basic security standards.
An order by a Delhi Police Assistant Commissioner of Police under section 144 CrPC mandates a CCTV camera in cash-in-transit vans and says cash boxes should be chained together. Police found that the CCTV in the van Shukla drove off with was defunct and the cash boxes were not chained.
The police have registered the FIR against the company under section 188 (disobedience to order duly promulgated by public servant) of the IPC.
So, if there is a police order for cash logistics companies, what is the problem? An industry insider points out the problem is with interpretation. “Some see the ACP’s order as limited to only the sub-division under his jurisdiction. The sub-division has only three police stations,” adds the insider. “For cash logistics companies, such nitpicking comes in handy in the absence of guidelines.”
This absence-of-norms line is pretty much what SIS Prosegur puts forward. Rituraj Sinha, Chief Operating Officer (COO), SIS Prosegur (India), says neither the Ministry of Home Affairs nor any other regulator has notified specific guidelines for cash-in-transit management or cash management operations. “No guideline mandates cash management companies to have CCTV camera on board a cash van. SIS Prosegur was pilot testing a technology at its own discretion to assess whether mobile bandwidth allows live transmission of video feed from mobile cash van to its National Operation Centre (NoC),” he adds.
Sinha says the Indian Banks’ Association formulated a working group in 2013 to develop standards and guidelines for cash-in-transit operations, but no specific notification has been issued.
In September 2014, it was reported that at the behest of RBI, a 14-member working group set up by Indian Banks’ Association had suggested norms for cash replenishment companies. It recommended that any agency which operates with up to 50 cash vans should have a financial net worth of Rs 5 crore; and for those operating with up to 500 vans the net worth should be Rs 100 crore.
CMS Infosystems, another big player in the cash logistics segment, says the guidelines are not far-reaching enough. “It had adopted a broad-based approach, without considering the actual risk involved or issues specific to geographies. We also advocated the inclusion of technology-based solutions, as against rudimentary practices reliant on manpower,” says a spokesperson of the company. At present, CMS Infosystems and SIS Prosegur (India) control nearly 80% of market, according to Cash Logistics Association of India. The companies say there are no guidelines from the Reserve Bank India.
In 2013, after a number of cash vans were robbed, Delhi Police wrote to the security manager of RBI seeking steps to ensure that banks were made responsible for security of vans carrying cash.
What police say
Special Commissioner of Police Taj Hassan says the role of the police is limited to verification of employees being hired by cash logistics companies. “We check the antecedents of guards and drivers employed by the agencies. The verification is conducted through the address given by the employee.”
Joint Commissioner of Police (southeastern range) Sanjay Beniwal says, “We are never informed about the movement of any cash in the city, as they are not under our purview. Our officials can’t give them the security. We may consider specific requests.”
Hiring and training
According SIS, it employs security guards either sourced from the group’s own training academies or through lateral hiring. Many are ex-servicemen or experienced security personnel.
After the November 26 heist, the training process has also come under scanner. Government officials as well as the company acknowledge lack of infrastructure. Training is done at six government-affiliated centres. The number of serving guards in Delhi has reached nearly 4 lakh.
O P Mishra, additional secretary (Home), Delhi, says the number of applications for guard training have increased rapidly. “I have written to the Ministry of Home Affairs to provide land where these training programmes can be conducted,” says Mishra, adding that there are no specific guidelines, as of now, for cash transaction agencies.
He says in many states, the training programmes are in a bad shape. “The training should also be uniform across all states so that guards from Delhi can seek employment elsewhere and vice versa. This matter has also been discussed with the MHA,” he adds.
A senior official at a security company says guards make the grade in his firm after going through a minimum 120 hours of training in 20 days. However, he admits they are not equipped to fight or fend off robbers. “These people are trained to react to alert officials when needed. We don’t teach them to be fighters.”
CMS Infosystems outsources its guard requirement to private agencies.
According to a report by Federation of Indian Chambers of Commerce and Industry (Ficci), the Department of Banking Operations and Development (DBOD) of the Reserve Bank of India (RBI) issued a circular to all banks giving guidelines to be followed by them with regard to the outsourcing of their activities to third party agencies. But somehow cash related activities did not find a place in the circular. This has created a situation where public money is at risk due to the following reasons
1.Varied standards/compromises adopted by different cash logistics companies
2.Delays in reconciliation and dispute management
3.No direct contact with the concerned bank during cash transfer operation
4.Mushrooming of new entrants without any credible financial net worth
5.Lack of a roadmap on required process improvements or technology intervention (electronic locks etc.) that meets global standards.
What cash logistics firms should do: Ficci proposals
1.Premises: The area should be closer to withdrawal centres. The vault premises should include physically independent areas. One is cash processing handling zone and one is the vault and it should be as per RBI C Class vault norms. There should be 24*7 electronic surveillance and monitoring.
2.The security van should have three independent compartments. The compartment for storing cash to be physically separated and locked from the other compartments. The vans should not carry more than 5 crore per trip. Each of the cash boxes must be secured to the floor with separate chains and should have two padlocks that can be opened or locked only by using separate keys available with different custodians.
3.The van should have one driver and one or two armed security guards depending on cash limit.
4.The guard must carry a single/double barrel guns to be used under valid licences.
5.To minimise loss due to fidelity/employee errors and improve quality of operations, all employees on company’s/vendor’s payroll should comply with minimum wage, PF, ESIC norms as applicable based on their skill levels. The employee credentials should be checked before selection. Pre-recruitment formalities should include police verification.
6.Set up training facilities for all categories of staff. Compulsory induction training of 80 hours should be imparted as a combination of classroom training and on-field training. Refresher training should be conducted once every year.
7.For risk mitigation, quarterly audit of all assets as well as internal operational processes and protocols. Audit should exist as an independent function within the organisation. Companies should be insured.