RBI ask to stop cash retraction system in ATMs

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The banks have done away with the cash retraction system in ATMs. The system, which enabled the machine to take back the currency if it is not removed within a certain time, was withdrawn last week after the Reserve Bank of India (RBI) agreed to National Payments Corporation of India’s proposal for removing the feature from all ATMs to deal with the increasing number of fraudulent claims about non-receipt of cash.
Banks have posted messages on their websites that the system has been disabled. The step has been taken to prevent the misuse of the system as RBI has received complaints about people trying to defraud banks by holding on to some withdrawn currency notes in ATMs and then claiming non-receipt of cash after the machine takes back the rest. The central bank also conducted a pilot project involving ATM machines without the cash retraction system.

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