The Central Association of Private Security Industry (CAPSI), the apex organization of India’s private security companies has recently written to Prime Minister’s Office, National Security Advisor and Finance Ministry seeking cancellation of Reserve Bank of India’s April 2018 circular on Cash Management.
The Reserve Bank of India’s decision to engage Foreign Cash Management companies to distribute National Cash to banks and ATM’s throughout India can pose major national and financial threat, said Mr. Kunwar Vikram Singh, Chairman of CAPSI.
Also Read - Offline payments capped at ₹200/transaction
“Moreover, this decision has resulted in the sudden death to more than 2000 medium and small enterprises (MSMEs) servicing banks for the last 20 years. Thousands of Ex-Servicemen have lost their means of livelihood and are now facing accurate financial crisis. Indian companies running cash management business will not be able to pay balance of EMIs of loans taken to buy cash vans to run their operations. This abrupt decision taken by RBI has created huge crisis for so many small and medium Indian Cash Management companies,” said Mr. Singh.
Stating that there was no reason for the RBI to get involved in the area of banking services and management which was till now the domain of banks who used to engage Cash Management companies as per their own rules and parameters, Mr. Singh said there is not a single incident where a Bank or RBI had to suffer financial losses due to money stolen or looted from cash vans operated by these Indian small and medium cash van companies as entire cash transported by these companies is totally insured.
CAPSI Chairman said sudden intervention of RBI into this domain is surprising and causes serious concerns. “The decision to handover all Cash Management operations to Foreign Companies is baffling. It is unthinkable to trust these Foreign Companies with our National Cash. One such company is presently owned by a foreign based Private Equity firm which can sell this company to anyone who can pay more for takeover. Even front companies of China or Pakistan can take over these companies. It is a serious matter related to India’s internal and financial security,” he said.
Mr. Singh further said these companies can also shut down their India operations in the event of their shares crashing in the financial markets. Under such a situation the entire banking system and ATMs will go dry for days. It is difficult to imagine the ground conditions when entire nation will suffer due to total absence of cash. This could trigger financial and economic chaos and lead to serious law and order problems in the country.
Mr. Singh said they have already written to the PMO, the National Security Advisor (NSA) and the Finance Ministry seeking their immediate intervention to analyze the potential National Risk created by the arbitrary RBI order. “We have urged Prime Minister Narendra Modi and the NSA to investigate the factors under which such decision was taken by the RBI as it smacks of a well-planned financial conspiracy to take over the National Cash of the country in connivance of an Indian company having strong political links to influence such a major policy change. We demand immediate withdrawal of RBI order,” he said.
“This matter was also brought to the notice of Mr. Piyush Goyal a few weeks back when he was handling the Finance Ministry affairs in the absence of Finance Minister Mr. Arun Jaitley. Mr. Goyal had promised to take the cognizance of the serious matter. We have also met Joint Secretary of Ministry of MSME and urged him to intervene as the decision of the RBI violates the MSME Act as entire work has been taken away from more than 2000 MSMEs and allowed to 2-3 MNCs. The matter was also brought to the attention of the Competition Commission of India due to the monopoly factor of the RBI Circular which is against the carter of the CCI,” Mr. Singh pointed out.