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Indian ATMs use obsolete techniques, lacks key security features leading to fraud

By Newsd
Updated on :
Source: timesofindia

Three of five ATMs in India use obsolete machinery and lack basic security features, making them a key targets for fake currency, as per the banking experts. The ATM’s cash loaders doesn’t have the “one-time combination” (OTC) technique, a technology that is quite common in advanced nations to run most of these machines.

The most alarming part is that maximum of the nation’s 220,000 ATMs are not checked by working closed-circuit television cameras (CCTV). The pitiable security condition lets cash loaders to use the ATMs whenever they want, without any specialist care.

As per the experts, this shows that issues like the recovery of fake notes bearing the “Children’s Bank of India” are tragedies bound to happen.

“We have urged the banks several times to install OTC locking system at the ATMs so that monitoring improves, unfortunately most banks do not pay heed,” said NSG Rao, secretary of Cash Logistics Association as per a report in HT.

Banks had no statistics on whether the CCTVs fitted in ATMs were working properly, he added.

After a number of cases of fake currency recovery from the various ATMs from different parts of the country, ATM security has become a concern. The reports of theft also saw a boost from 596 cases in 2013-14 to over 900 in 2015-16.  A man, lately also received a photocopy of Rs 2,000 note from a SBI ATM in Shahjahanpur, UP.

Cash is typically loaded not by banks but logistics firms. They are also responsible for carrying of notes from bank currency chests to branches and ATMs. These companies also pay attention to the maintenance of these machineries. Nearly Rs 14,000 crore is carried daily by cash vans across the country.

The OTC locking system let the loaders to have a one-time combination number like a password, to access the ATM. Once loading is done, the combination expires and cannot be used any longer. This helps in tracing the exercise and minimizes fraud.

The security issues remain to be a threat, said a senior bank official who did not wish to be identified.