India wants banks to increase ATM security

An attack last month on a woman at an ATM in Bangalore has led to demands for enhanced security at ATMs. Since placing armed security guards at all of the 165 million ATMs in the country would be impractical, banks need to beef up their security through increased staffing and better technology. Reports of armed guards robbing customers is also a problem.

For unguarded ATMs, the Maharashtra government wants the banks to install functioning CCTV cameras inside and outside the ATM booths by the end of January. It also wants posters removed from windows to ensure clear visibility.

The measures were discussed at a December 4 meeting attended by Reserve Bank of India chief general manager R Keshavan, Maharashtra director general of police Sanjeev Dayal and other officials. States such as Karnataka and Tamil Nadu are also asking banks to put in place similar arrangements.

The central bank has also asked the Indian Banks' Association to form a committee and draft standard procedures that limit the risks associated with the physical transfer of cash.

According to the managing director and chief executive officer of a private sector bank who did not wish to be named, the banks will need to pass the additional cost on to their customers, doubling the cost of each transaction to roughly US$0.15. The head of another private sector bank is worried that customers will respond negatively, and is unsure if customers are willing to shoulder the extra fees.