In a meeting chaired by Rajeev Gauba, Additional Secretary in the Ministry of Home Affairs, and attended by senior officials of various enforcement agencies, state government officials said RBI and some other banks use the services of private guards for cash management by designating them as caretakers to avoid the licensing requirement under the act. Agencies that provide security to cash vans and provide armoured car services to banks fall under the Private Security Agencies Regulation Act, according to the Ministry of Home Affairs and need to follow the minimum 51% Indian shareholding requirement. The home ministry, in the meeting, clarified that security provided to protect property including provision of armoured car services falls under the definition of private security, and such caretakers are private guards and agencies providing such service would need to obtain a licence under the PSAR Act. The home ministry said the matter would be taken up with the finance ministry.
The issue of regulating guards manning security vans has come up following several attacks on cash vans. At present, most banks have outsourced the security of cash vans to cash management companies. These companies, most of them with international partners, provide comprehensive cash management solutions, including storage of cash, transportation and refilling ATMs. They employ over 40,000 people and transport close to Rs 15,000 crore of cash every day.