DCM (Plg) No.3563/10.25.07/2017-18
The Chairman / Managing Director
/ Chief Executive Officer,
Public Sector Banks / Private Sector Banks / Foreign Banks /
Regional Rural Banks / Primary (Urban) Co-operative Banks /
State Co-operative Banks / District Central Co-operative Banks.
Madam / Dear Sir,
Cash Management activities of
Standards for engaging the Service Provider and its sub-contractor
It was announced vide para 11 of
the Statement on Developmental and Regulatory Policies dated April 05,
2018 that in view of the increasing reliance of the banks on
outsourced service providers and their sub-contractors in cash management
logistics, certain minimum standards will be prescribed for the service
provider / sub-contractors who are engaged by the banks for this purpose.
Accordingly, it has been decided that the banks shall put in place certain
minimum standards in their arrangements with the service providers for cash
management related activities. The details of the same are in the Annex.
Banks are advised to review their existing outsourcing arrangements and
bring them in line with these instructions within 90 days from the date of
2. Further, as the cash held
with the service providers and their sub-contractors continue to remain the
property of the banks and the banks are liable for all associated risks,
the banks shall put in place appropriate Business Continuity Plan approved
by their boards to deal with any related contingencies.
Standards for engaging the
Service Provider and its sub-contractors
A. Eligibility Criteria
(1) Minimum net worth1 requirement of ? 1 billion. The net worth of at
least ? 1 billion should be maintained at all times.
[The net worth requirement will
come into force with immediate effect for all future outsourcing agreements
of the banks. In case of existing agreements, the banks shall ensure that
the net worth criteria is met as on March 31, 2019 (audited balance sheet
to be submitted to the bank concerned by June 30, 2019) or at the time of
renewal of agreement, whichever is earlier].
B. Physical / Security
(1) Minimum fleet size of 300
specifically fabricated cash vans (owned / leased).
(2) Cash should be transported
only in the owned / leased security cash vans of the Service Provider or
its first level sub-contractors. Each cash van should be a specially
designed and fabricated Light Commercial Vehicle (LCV) having separate
passenger and cash compartments, with a CCTV covering both compartments.
(3) The passenger compartment
should accommodate two custodians and two armed security guards (gunmen)
besides the driver.
(4) No cash van should move
without armed guards. The gunmen must carry their weapons in a functional
condition along with valid gun licenses. The Service Provider or its first
level sub-contractor should also furnish the list of its employed gunmen to
the police authorities concerned.
(5) Each cash van should be GPS
enabled and monitored live with geo-fencing mapping with the additional
indication of the nearest police station in the corridor for emergency.
(6) Each cash van should have
tubeless tyres, wireless (mobile) communication and hooters. The vans
should not follow the same route and timing repeatedly so as to become
predictable. Predictable movement on regular routes must be discouraged.
Staff should be rotated and assigned only on the day of the trip. With
regard to security, additional regulations / guidelines as prescribed by
Private Security Agencies (Regulation) Act, 2005, the Government of India
and the State Governments from time to time must be adhered to.
(7) Night movement of cash vans
should be discouraged. All cash movements should be carried out during daylight.
There can be some relaxation in metro and urban areas though depending on
the law and order situation specific to the place or the guidelines issued
by the local police. If the cash van has to make a night halt, it
necessarily has to be in a police station. In case of inter-state movement,
changeover of security personnel at the border crossing must be
(8) Proper documentation
including a letter from the remitting bank should be carried invariably in
the cash van, at all times, particularly for inter-state movement of
(9) ATM operations should be
carried out only by certified personnel who have completed minimum hours of
classroom learning and training. The content of such training may be
certified by a Self-Regulatory Organisation (SRO) of Cash-in-Transit (CIT)
Companies / Cash Replenishment Agencies (CRAs) who may tie up with agencies
like National Skill Development Corporation for delivery of the courses.
(10) The staff associated with
cash handling should be adequately trained and duly certified through an
accreditation process. Certification could be carried out through the SRO
or other designated agencies.
(11) Character and antecedent
verification of all crew members associated with cash van movement, should
be done meticulously. Strict background check of the employees should
include police verification of at least the last two addresses. Such
verification should be updated periodically and shared on a common database
at industry level. The SRO can play a proactive role in creating a common
data base for the industry. In case of dismissal of an employee, the CIT /
CRA concerned should immediately inform the police with details.
(12) Safe and secure premises of
adequate size for cash processing / handling and vaulting. The premises
should be under electronic surveillance and monitoring round the clock.
Technical specifications of the vault should not be inferior to the minimum
standards for Chests prescribed by the Reserve Bank. The vault should be
operated only in joint custody and should have colour coded bins for easier
storage and retrieval of different types of contents.
(13) All fire safety gadgets
should be available and working in the vault which should also be equipped
with other standard security systems live CCTV monitoring with recording
for at least 90 days, emergency alarm, burglar alarm, hotline with the
nearest police station, lighting power backup and interlocking vault entry
(14) Work area should be
separate from the cash area. The premises should be under the security of
armed guards whose number should have reference to the scale of operations
specific to the location but not less than five in any case.
(15) Critical information like
customer account data should be kept highly secure. Access to the switch
server should be restricted to banks. Interfaces where a bank gives access
to the service provider or its sub-contractor to the bank’s internal server
should be limited to relevant information and secured.
1 Net worth will consist of ‘paid up equity capital,
free reserves, balances in share premium account and capital reserves
representing surplus arising out of sale proceeds of assets but not reserve
created by revaluation of assets’ adjusted for ‘accumulated loss balance,
book value of intangible and deferred revenue expenditure, if any