The Reserve Bank of India (RBI) is set to bring back the cash retraction facility in selected ATMs to enhance customer security and prevent fraud.
Under this system, if a customer does not collect their cash within a specific time, the ATM will automatically pull the cash back into its system.
What is Cash Retraction?
Cash retraction is a technology where the ATM retrieves cash left uncollected in the cash tray. This feature was originally discontinued in 2012 because fraudsters misused it.
They would withdraw part of the cash, but the machine recorded the full withdrawal, causing financial losses to banks.
Now, RBI plans to relaunch the feature with advanced technology to address such issues, ensuring customer safety and minimizing fraudulent activities.
New Measures Against ATM Fraud
After the discontinuation of the cash retraction facility, fraudsters adopted new techniques. One common method involved placing fake covers on cash trays to trap withdrawn money.
Customers believed their transactions failed, but fraudsters would later remove the covers and steal the cash.
To combat these issues, RBI has instructed banks to adopt modern security measures in ATMs. This includes upgrading machines with technology that prevents such fraudulent tactics.
Focus on High-Risk Areas First
RBI has directed banks to prioritize the implementation of this facility in ATMs located in areas with high rates of fraud.
Banks must make technical upgrades to ensure the safety of customers’ money and reduce fraud incidents.
Enhanced Security for Customers and Banks
The reintroduction of cash retraction will address the problem of customers forgetting to collect their cash and protect them from fraudsters.
This advanced security feature will be a significant step toward safeguarding both customers and banks against financial losses.
