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Next time you go to an ATM to withdraw cash, don't worry about the banknotes getting sucked back by the machine if not collected immediately, as RBI has asked all banks to immobilise the 'cash retraction facility'.
At the same time, customers will have to be extra careful in collecting the cash dispensed by the ATM, as they cannot later claim the money from the bank, which was the case when this 'cash retraction facility' was in place at the ATMs. Most of the banks, including HDFC Bank, Axis Bank and Canara Bank, have already removed the cash retraction facility from all their ATMs, while the withdrawal process for this facility is underway for few remaining ATMs.
As per RBI directions, the banks are communicating to their customers about the withdrawal of this facility, under which the cash goes back into the ATM machine if not collected within a stipulated time, which is generally 10-15 seconds, but varies from bank to bank.
The facility was initially implemented to avoid the cases of someone else getting the money, if the actual cardholder forgets to collect the withdrawn cash before leaving the ATM.
However, RBI in the past one year has come across banks reporting several instances of frauds pertaining to mis-use of cash retraction facility at the ATMs.
The typical modus operandi has been to hold on to a few pieces of notes in ATM machines that have cash retraction system, while allowing one or two pieces of notes to be retracted and then claiming non-receipt of cash. Since retracted transactions are credited back to the customer's account, the balance in the fraudster's account remains unaffected even after collecting bulk of the delivered cash.
The ATMs do not have the capability to count the pieces of retracted notes, thus leaving a loophole for committing such frauds.
Source: Financial Express
At the same time, customers will have to be extra careful in collecting the cash dispensed by the ATM, as they cannot later claim the money from the bank, which was the case when this 'cash retraction facility' was in place at the ATMs. Most of the banks, including HDFC Bank, Axis Bank and Canara Bank, have already removed the cash retraction facility from all their ATMs, while the withdrawal process for this facility is underway for few remaining ATMs.
As per RBI directions, the banks are communicating to their customers about the withdrawal of this facility, under which the cash goes back into the ATM machine if not collected within a stipulated time, which is generally 10-15 seconds, but varies from bank to bank.
The facility was initially implemented to avoid the cases of someone else getting the money, if the actual cardholder forgets to collect the withdrawn cash before leaving the ATM.
However, RBI in the past one year has come across banks reporting several instances of frauds pertaining to mis-use of cash retraction facility at the ATMs.
The typical modus operandi has been to hold on to a few pieces of notes in ATM machines that have cash retraction system, while allowing one or two pieces of notes to be retracted and then claiming non-receipt of cash. Since retracted transactions are credited back to the customer's account, the balance in the fraudster's account remains unaffected even after collecting bulk of the delivered cash.
The ATMs do not have the capability to count the pieces of retracted notes, thus leaving a loophole for committing such frauds.
Source: Financial Express
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