RBI Steps In to Review AGS Transact’s ATM Cash Processes

The Reserve Bank of India (RBI) is reviewing the cash management practices of AGS Transact Technologies, a key player in ATM cash handling. This comes after concerns emerged over untraceable funds, prompting a crucial meeting with banks that rely on AGS Transact’s services.

Concerns Over Missing Funds

Since mid-January, banks have struggled to track cash handled by AGS Transact, leading to growing concerns about potential discrepancies. The company has denied any wrongdoing, stating that it is actively reconciling cash across ATMs and vaults while following standard banking procedures. Despite these assurances, RBI’s intervention highlights the seriousness of the situation.

Scrutiny on ATM Cash Handling Practices

A major focus of the review is on how cash moves from AGS Transact’s vaults to ATMs. While ATM cassettes are designed to be secure, risks arise during cash transfers. Less than 40% of ATMs have adopted the cassette swap system introduced in April last year, which requires two-factor authentication to minimise human interference.

Banks have yet to agree on how to cover the additional costs of these security measures, leaving ATM operations vulnerable to manual handling risks.

ATM Disruptions and Migration to New Service Providers

The cash shortages at ATMs managed by AGS Transact have worsened since February 2025, affecting an estimated 30,000-35,000 machines, as per media reports. The company services at least 16 banks, including major players like State Bank of India (SBI), HDFC Bank, ICICI Bank, Bank of India, Union Bank of India, and Axis Bank.

However, SBI and ICICI Bank have already started moving to other service providers such as CMS Info Systems and Hitachi. The RBI is now overseeing this transition while working on solutions to recover the missing cash.

Financial Troubles and Insolvency Proceedings

AGS Transact is facing additional challenges with rising financial liabilities. Maxwell Aircon, one of its operational creditors, has initiated insolvency proceedings over unpaid dues of around ₹38 crore. This legal action raises further uncertainty about the company’s future and its ability to continue operations in the ATM cash management sector.

Conclusion

With ATM cash shortages and security concerns affecting the banking industry, urgent steps are needed to stabilise operations. Stricter regulations, improved security in cash handling, and a quicker shift to alternative service providers may help restore trust in the system. As RBI continues its review, the focus remains on ensuring a smooth transition and strengthening cash management practices to prevent further disruptions.

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