The logistics sector in India is expanding at an astonishing rate. This is primarily due to the nation's rapid industrial and economic progress. Additionally, India joined the World Trade Organization in 1995, which aided in the promotion of exports from the nation. The demand for cash transportation services has also expanded as a result of the Indian economy's growth. One of the most significant areas of the logistics sector has been cash logistics, which supports the nation as a significant industry with significant risks. Nevertheless, this has made it difficult to deploy electronic payment solutions to address these issues.
Running the fleet is a 24-hour activity that is necessary for any logistics company. However, the requirement for adequate safety and security has been a major issue for cash logistics. Cash is still the most precious thing for everyone, despite the fact that more digitized solutions have made a wide range of different payment sources available worldwide. As a result, the need for cash logistics and management services has been rising.
Over the past few decades, cash logistics has increased significantly. It has therefore seen increased investments in cutting-edge technologies and company growth. A report from Allied Market Research projects that the global cash logistics market would bring in $30.70 billion by 2025. All throughout the world, industries have been affected by the pandemic and the logistics business is no different in any field including cash management.
What is cash logistics management?
The movement and handling of physical cash from one place to another is referred to as cash logistics service. It offers services including restocking ATMs and managing cash in transit. The actual physical transfer of cash from one location to another is included in cash-in-transit services. Cash management includes tasks including bill quality inspection, sorting, and wrapping. Implementing cash logistics services leads to effective project management, lower operational costs, and resource management for infrastructure.
According to a report by FICCI, about 40,000 people are employed in this industry, which provides cash replenishment services to 80,000 ATMs. All around the nation, there are over 6,000 cash trucks that transport about INR 15,000 crore in cash each day. Additionally, this industry stores some 4,000 crores of cash overnight in vaults.
What is the problem in the cash logistics industry?
Banks and corporate entities need secure cash transfer and management services due to growing security concerns. In order to provide better services and differentiate themselves from the competition, banks have increased the number of ATMs they have in both urban and rural areas, which has raised demand for cash logistics services and, once again, calls for secure cash transportation to all locations. Secured cash management and cash logistics services are required by the worldwide cash logistics business.
Rising ATM needs: The Reserve Bank of India (RBI) estimates that more than 3 lakh crore rupees were circulated in India during the 2020 fiscal year. The global cash logistics industry is being driven by an increase in cash transactions, an increase in demand for ATM presence, and an increase in demand for safes and vaults for handling cash.
Fleet efficiency: The second major issue is the "environmental" desire to reduce deliveries and pickups for a heavily armed, heavily loaded vehicle that may only reach single-digit kilometers per 4 liters since there is a rising awareness of the environmental impact of the cars used in the CIT industry.
The cash logistics sector has found it challenging to remain competitive and support overall growth due to these issues. Let's quickly review the suggested rules for cash logistics companies in India before moving on to solutions to the problems.
- The organization should have a suitable location, accessible to police stations, withdrawal points, and vaults. It should be possible to deposit cash, collect it, sort it, count it, deliver or dispatch it on protected vehicles, and store it securely.
- The cash processing and vault sections should have restricted and controlled access, and the entire property should be under constant CCTV observation. The security van should have three distinct compartments and be designed like a light motor vehicle. The currency storage compartment needs to be physically isolated from the other compartments and locked. The vans ought to be tracked and equipped with GPS. The currency compartment needs to be specifically strengthened with steel and is only accessible with the operator's permission.
- Security guards with guns should ride in the vans, or there should be barrel gunmen. Other than that, it should be required to be used when transporting cash worth more than Rs. 20 lakhs every trip.
In cash logistics security of cash is primary concern and improving no of trips and turnaround time (TAT) is secondary but it affects profit. This is how you can improve the another aspect of cash logistics services:
End-to-end visibility: Since cash management relies heavily on data, all of the data must be accessible. The companies concerned need to know whether the problem occurred at the retailer, when the cash was being transported, or at the vault. Did someone attack the van, or did the driver take off with the money? Real-time access into cash in transit is essential for implementing corrective actions and seeing potential areas for process improvement.
Vehicle Dash-Cam: For cash logistics enterprises engaged in cash-in-transit and cash management, vehicle tracking is a requirement. Detours can be taken by drivers, or the vehicle could be the target of a well-planned theft attack. Monitoring the movement of the vehicle and all activity occurring inside it is therefore essential to reducing any such malicious acts.
Route planning : Google Maps was hardly around more than a decade ago. We now anticipate being able to quickly view and locate directions between almost any location on Earth. The world has already changed as a result of these opportunities and the features and algorithms that are currently accessible in this field, and they will continue to have an impact on all industries that use logistics in any way. The planner will help organize the route in the cash logistics sector, making the trip cost-effective and effective while increasing efficiency.
Indian cash logisticians have made impressive progress, whether it is through expanded ATM accessibility at all potential locations or the introduction of mobile ATMs in times of COVID. It is crucial to realize that managing and transporting cash is a complex process that calls for a multitude of safety precautions.
What is cash logistics?
Cash logistics refers to cash in transit, it is majorly used by banks to replenish cash supply in ATM (Automatic teller machine)
What is a cash management service in banking?
Moving cash from bank to ATM or bank to another location is known as cash management service in banking.