As agencies handling cash operations and transfers face shortage of armed private security guards
The dwindling number of private security guards, who provide logistic support to banks, could hit operations at ATMs as cash withdrawal demand increases substantially during the festive season.
According to industry estimates, the number of armed security guards in agencies handling cash operations and their transfer has come down to one-third of what it was six months ago. These security guards hailing from Bihar, Uttar Pradesh and other parts of the country take leave to join their families during the festival season beginning from Navratra and Dussehra and ending with Diwali.
This is certainly contributing 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, officials said. “There could be a cash crunch due to shortage of armed guards with various companies. The increase in loading time to once every five days is an indicator to that,” the official added.
However, public sector bank officials said adequate measures were being taken to ensure that the need for extra cash by customers during the festive season is taken care of.
About Rs.15,000 crore in cash is moved on behalf of banks everyday, according to Cash Logistics Association. The fall in the number of armed security guards is because of various reasons including the fact that the police in many States have raised objections, saying private arms licence cannot be used for purposes other than that defined by the law, said the Association. This has lead to a staff crunch in firms that do not get a formal licence to operate armed services for cash logistics.
According to cash logistics firm SIS Prosegur’s managing director Rituraj Sinha, several rounds of discussions have been held between the government and the banks, but the issue remains unresolved. “We may have to stop the cash logistics services if the issue is not sorted out soon. Looting incidences have also instilled fear among cash logistics companies,” he added. Cash van looting incidents have gone up to one incident per month in 2012-13 compared with just one in three months in 2011-12, he said. Association secretary general N.S.G. Rao is of the view that the Indian Arms Act, 1959, should be relaxed to suit the requirements of bigger cities. There are over 1 lakh ATMs across the country. Of these, nearly one-third are in rural and semi-urban areas.