The National Payments Corporation of India (NPCI) has issued a new advisory regarding the reactivation of the cash retraction feature in ATMs, specifically targeting the mitigation of shutter overlay frauds. This measure revisits an earlier directive from January 2012, which had advised disabling cash retraction to curb fraud risks associated with it. Over the past year, member banks have reported a rise in cases involving fake shutter overlays, a fraudulent tactic where criminals install deceptive devices on ATM shutters to manipulate transactions. This issue was thoroughly reviewed in the NFS Steering Committee Meeting in January 2024, followed by discussions among member banks, ATM Original Equipment Manufacturers (OEMs), and the Confederation of ATM Industry (CATMi). Their collective recommendations were submitted to the Reserve Bank of India (RBI) for further evaluation.
As a result, RBI has permitted banks and White Label ATM Operators (WLAOs) to implement cash retraction as part of their risk management protocols for a designated period. This re-enablement is contingent on each bank’s risk assessment processes and includes a focus on customer education regarding this feature. Additionally, the existing RBI Turn Around Time (TAT) guidelines for failed transactions will also apply to incidents involving cash retraction. NPCI urges members to disseminate these instructions to relevant departments, ensuring that any transaction disputes related to cash retraction are resolved promptly and accurately.
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NATIONAL PAYMENTS CORPORATION OF INDIA
NPCI/NFS/OC.No.423/2024-25 Dated: 04th November 2024
To,
All Members of the National Financial Switch (NFS)
Sub: Cash Retraction facility in ATMs to address shutter overlay frauds
Dear Sir / Madam,
We refer to NPC1 OC No. 47 dated 18th Jan 2012 wherein members were advised to disable cash retraction facility to contain cash retraction related frauds. During the past one year, several instances of fake shutter overlay have been reported by member banks of NFS.
The Modus Operandi of fake shutter overlay related frauds, and the possible solution were discussed in NFS Steering Committee Meeting held on 23rd Jan 2024. Subsequently, as agreed by SC members, the working group meetings were conducted with the group of member banks, OEMs and representative from CATMi. The recommendations of the working group were submitted to RBI DPSS.
In view thereof, to curb such frauds, RBI vide their letter no. CO.DPSS.POLC.No.S695/02-10-004/2024-2025 dated Or Oct 2024 has granted permission banks I WLAOs to implement suitable cash retraction at ATMs / Cash recyclers, as per their risk management processes (for period as required). Banks are advised to ensure adequate customer awareness regarding enablement of cash retraction. The framework of Turn Around Time (TAT) for failed transactions issued by RBI shall apply to incidents of cash retraction.
Members are requested to disseminate the above-mentioned information to the departments concerned. Acquirers to ensure that customer transaction disputes arising in such scenarios are handled appropriately.
Yours sincerely,
SD/-
Kunal Kalawatia
(Chief Products)
