RBI permits Board-level delegation for monitoring ATM cassette swap implementation
The Reserve Bank of India has issued a notification dated October 01, 2026, permitting banks to delegate the responsibility of overseeing the implementation of cassette swaps in ATMs from the Board of Directors to a Committee of Executives. This communication partially amends the earlier instructions issued on March 31, 2022 relating to cassette swap mechanisms in Automated Teller Machines (ATMs).
This change is part of a broader alignment with the updated governance framework applicable to various categories of banks, including Commercial Banks, Small Finance Banks, Payments Banks and Local Area Banks, following the 2026 amendment directions on governance.
Background: Original RBI instructions on cassette swaps
The Reserve Bank of India had earlier issued a circular bearing reference RBI/2021-22/190 DCM (Plg.) No.S 1117/10.25.007/2021-22 dated March 31, 2022. That circular dealt with the operational framework for cassette swaps in ATMs, and among other aspects, required direct oversight by the Board on the implementation progress.
Under the original framework:
- The Board of each bank was expected to monitor the rollout and implementation of cassette swap arrangements.
- The monitoring function was envisaged at the highest governance level, reflecting the importance assigned to ATM currency management, security, and operational risk.
With the evolution of governance norms in 2026, the RBI has now modified this requirement to introduce more flexibility while retaining accountability within the bank’s governance structure.
New modification introduced by the October 01, 2026 communication
The new RBI communication, issued as RBI/2026-27/273 DCM (RMMT) No.S 2107/20-02-002/2026-27 and addressed to the Chairman, Managing Director and Chief Executive Officer of all banks, introduces a specific and limited modification to paragraph 3 of the March 31, 2022 circular.
Core change
The circular states that:
In partial modification to para 3 of the aforesaid circular, it is advised that monitoring the progress of implementation of cassette swap may be delegated by the Board to a Committee of Executives1 of the bank.
In essence, while the responsibility for ensuring proper implementation of the cassette swap framework remains within the bank’s governance structure, the day-to-day and ongoing monitoring role can now be entrusted to a Committee of Executives, rather than requiring direct and exclusive Board-level monitoring.
Effective date and linkage to governance amendments
A footnote in the communication clarifies that the expression “Committee of Executives” has been introduced with effect from October 1, 2026. This substitution follows the issuance of the following governance amendment directions in 2026:
Reserve Bank of India (Commercial Banks-Governance) Amendment Directions, 2026Reserve Bank of India (Small Finance Banks-Governance) Amendment Directions, 2026Reserve Bank of India (Payments Banks-Governance) Amendment Directions, 2026Reserve Bank of India (Local Area Banks-Governance) Amendment Directions, 2026
These governance amendments formally recognize and structure the role of executive-level committees in the internal governance framework of different categories of banks. The cassette swap monitoring delegation is aligned with these updated norms.
Scope and nature of the delegation
What can be delegated?
Under the modified instruction:
- The monitoring of the progress of implementation of cassette swap arrangements may be delegated to a Committee of Executives.
- This covers tracking milestones, implementation timelines, operational readiness, compliance with RBI guidelines, and feedback on practical issues arising in deployment.