Cash logistics firms engaged in the recalibration of Automatic Teller Machines and retrieval of scrapped currency notes from ATMs in the weeks that followed the withdrawal of Rs 500 and Rs 1,000 notes on November 8 are now saddled with unpaid bills from banks of up to Rs 110 crore, sources told The Indian Express.
A majority of banks have questioned the cost incurred by the firms between November 10 and December 30, 2016, said three persons familiar with the development.
According to sources, at least 90 per cent of the banks have deferred payments, stating that services pertaining to ATM recalibration and retrieval of old cash are not a part of their contract with the logistics firms.
State Bank of India (SBI), which is heading a task force on this issue, said that it is yet to receive any bills, which have to be routed through managed service providers (MSPs) who outsource the job of refilling to cash logistics firms.
Some banks have deferred payments as they believe the service provided by the logistics firms during demonetisation were in national interest, said sources. A number of banks have referred the issue to their boards to take a decision, they said.
“Even after a long gap of time, a majority of banks have not settled the dues of the cash logistics companies. Large amounts of payment have been withheld by the banks for one reason or other. Our boys have worked day and night for several days during demonetisation but now that the job is over, the banks are not very accommodative,” said N S G Rao, secretary general, Cash Logistics Association of India (CLAI).
According to sources, the total cost of recalibration and retrieval of old cash works out to Rs 5,615 per ATM. However, banks have been instructed by the finance ministry to pay Rs 4,000 per ATM to the cash logistics companies, sources said.
“We have had over three meetings with a task force headed by the SBI that was set up to ensure that payments are cleared but not much has moved,” said Rao, who is a member of the task force that includes members from private banks and the cash logistics industry.
“So far, only three private banks — ICICI, HDFC and Axis — have fully cleared the dues of cash logistics firms,” said Rao.
Neeraj Vyas, deputy managing director and chief operating officer of SBI, told The Indian Express that the bank does not have any direct contract with the cash logistics firms.
“Maintenance of ATMs and refilling is done by managed service providers (MSPs) who outsource the job of refilling to cash logistics firms. So far, the MSPs have not submitted any invoices for services provided by the cash logistics firm to us, so how can we settle any claim?” said Vyas.
Rao, however, said the cash logistics firms have submitted all invoices pertaining to services provided by them during demonetisation to the MSPs.
The cash logistics industry employs 30,000 people and 9,000 cash vans to refill 2.2 lakh ATMs spread over 650 districts in India. This industry serves about 25,000 ATMs daily. Currently, there are seven cash logistics firms in the country. Typically, these firms, which are entrusted with the duty of transporting cash and refilling ATMs are paid loading charges based on the number of times an ATM is refilled.
After Prime Minister Narendra Modi announced the withdrawal of old currency notes of Rs 1,000 and Rs 500 on November 8, 2016, ATMs across the country had to be recalibrated to fit new notes of Rs 2,000 and Rs 500. Inside each ATM are four containers known as cassettes each of which can hold 2,500 individual notes.
“These unpaid bills purely pertain to fuel we have burnt during demonetisation, overtime paid to employees, and food and shelter provided to them when they were working non-stop to retrieve old currency notes and modify the cassettes of ATMs to dispense the correct currency. We were called in by the RBI (Reserve Bank of India) panel to help and we did exactly that but now the banks don’t want to pay us for the work we did,” said the chief operating officer of a cash logistics company, speaking on the condition of anonymity.
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