The RBI has recently issued a notification regarding cash-in-transit companies involved in replenishment services of ATMs, cash pickups and drops. As per the notification, only those companies are recognized for these services which have a minimum net worth of INR 100 crore and a fleet of 300 vehicles, among other requirements. The cash logistics private security agencies at large don’t go well with the notification and voice their concerns. As Central Association of Private Security Industry (CAPSI) claims, the RBI decision has shaken more than 65 medium and small companies that are involved in cash logistics, and which do not fall under the criteria, and therefore they would render jobless and have to shut their companies.
In this connection, CAPSI has approached Competition Commission of India (CCI) and petitioned to D K Sikri, Chairperson, CCI to take immediate action to stop the directive of RBI which is against the spirit of fair competition and jeopardize the interests of a large section of the industry. CAPSI has also approached MSME as the RBI circular grossly violates the spirit of the MSME act; the decision will result in closing of more than 65 companies. As CAPSI suggests, high ranking officials of MSME assured support to the cause.
A delegation of CAPSI comprising Kunwar Vikram Singh, Anil Puri, Pawan Alhuwalia, Mahesh Sharma and Sanjeev Paul met Shiv Pratap Shukla, Minister of State, Ministry of Finance and discussed the RBI notification towards CIT business. The Minister informed that he will bring this serious issue to the notice of PMO so that appropriate action can be taken soonest. They also discussed the negative impact of GST on the entire PSI business which the Minister said that the matter is already under consideration of the Ministry.
The grouping of private security agencies has also written a letter to the Prime Minister of India, Narendra Modi for his intervention. In the letter Kunwar Vikram Singh, Chairman, CAPSI alleged that the RBI decision would facilitate only two or three foreign-based companies and would create monopoly of foreign firms in the business.
CAPSI also filed a writ petition in the Delhi High Court challenging the RBI notification. A separate petition was filed by Premier Shield Pvt. Ltd. which was heard on 30 May 2018.The judge clubbed their petition with that of CAPSI, and that will be heard on 17 August 2018. Considering that only partial redressal has been granted, the association has decided to file an appeal to a Division Bench, which is likely to come up for hearing in July when the court reopens.
Kunwar Vikram Singh, said that the RBI decision is a serious security threat to the economic state of nation and the nation at large. Under the notification only a few big companies mainly foreign ones will be eligible to undertake this critical national assignment. This will render more than 65 companies out of business and cause them huge financial losses. Majority of Indian companies are being run by ex servicemen.
“The government intelligence organizations must carry out a risk analysis on handing over the entire cash management to foreign based companies, and imagine a scenario when they stop cash delivery to banks and ATMs under instructions from their masters who may conspire with our enemies and create huge upheaval in the country. It can prove fatal for a country like India,” said the Chairman, “Moreover, should these companies crash due to some international financial crisis and terminate their operations in India, what will be the fate of our banking sector and public enterprises. RBI must have considered these serious security threats before taking such decision.”
CAPSI represents more than 2,000 entities that provide private security services.