As banks bear down on the final stages of year-2000 preparations, security is a grave concern.

Bank customers are expected to withdraw extra cash as insurance against year-2000 mishaps, heightening fears that robberies will surge.

"This holiday season could pose the greatest risk ever of robbery to bank branches and customer homes," said Karen Panker, associate director of the American Bankers Association. She was among several speakers sounding such warnings at a recent ABA-sponsored conference call.

"We expect an increased risk of robberies to stores, branches, and customers, and we see an increased risk of disruptive customer behavior," said William R. Wipprecht, senior vice president and director of security for Wells Fargo Bank in San Francisco.

The Federal Reserve has said it would pump an extra $50 billion into circulation at yearend to alleviate possible cash hoarding. This would bring U.S. currency in worldwide circulation up to $529 billion.

In a recent survey by the Gallup Organization, 42% of adults said they expected automated teller machines to fail in the new year, Mr. Wipprecht said.

He estimated that Wells Fargo customers already have withdrawn $250,000 over the last few months in preparation for 2000.

To guard against theft, banks should start cash-management planning and robbery-prevention training, he said.

Banks could increase armored car deliveries to reduce the amount of cash held in each branch, Mr. Wipprecht said. He also suggested immediately transferring customer deposits into vaults and splitting cash into multiple deposit boxes to reduce exposure.

Banks should also adhere to cash limits in each branch, he said. One office might act as a hub to fulfill cash requirements of nearby branches that fall short.

James Andrews, senior officer and crime prevention coordinator with the Chesterfield County (Va.) Police Department, said banks should discuss year-2000 security needs with local law enforcement departments. He recommended that banks consider hiring a security company or off-duty police officers.

"If you're hiring security, you need to determine beforehand if they'll be inside or outside the bank, armed or unarmed," he said.

Unarmed guards are better at defusing highly charged situations and preventing injuries, he said.

Mr. Andrews said having a marked police car in a parking lot could be a deterrent. He noted that robberies in parking lots have been on the rise in Virginia.

Customers "need to rethink the issue (of withdrawing cash) and be advised on the alternatives," Mr. Wipprecht said. He recommended designating tellers at each branch to speak to fearful customers.

Banks could suggest that customers who still want to withdraw their money in large amounts hire a police escort, he said.

Tellers could also urge that withdrawals be converted into cashier's or travelers checks.

Customers should be warned that their insurance policies may not cover all the cash in their homes if they get robbed, Mr. Andrews said.

Mr. Wipprecht said that as the changeover nears, customers could become more nervous-and could take out their anxieties on bank employees. Civil disturbances could also spill over into bank offices.

"You need to anticipate and prepare for the unexpected," Mr. Wipprecht told an estimated 1,250 bankers who listened to the seminar. "An emotionally charged event like Y2K could aggressively escalate into harassment, verbal abuse, and physical threats."

Wells has devised a daily year-2000 checklist for branch managers. They are to record the volume of daily branch activity and ATM use. Cameras, doors, night safes, and ATMs will be checked to ensure they are in working order.

Banks should be especially attentive to time- and date-sensitive equipment such as VCRs and ATMs, Mr. Wipprecht said.

Federal Bureau of Investigation records show bank robberies have declined, to 7,500 last year from 9,500 in 1992. The FBI is predicting 6,500 to 7,500 this year.

"The peak robbery season coincides with the holiday season," said John Conditt, coordinator of the FBI's National Bank Robbery program.

The FBI has released a list of burglars it expects to be more active next year. The most threatening is a gang of immigrants from Yugoslavia, Albania, and Croatia, or "YACs" in police lingo.

In the past few years they have carried out 500 burglaries, taking $600 million from grocery stores and banks along the East Coast and in Los Angeles and San Diego, officials say.

The group, which tends to strike over three-day holiday weekends, has been successful at disabling alarm systems and then gaining entry through roofs. The New York City Police Department has a task force to combat them.

The FBI has received increased number of requests for its free bank- robbery-awareness training sessions, Mr. Conditt said.

The best defense, he said, is adherence to good security practices. He advised bank managers to pay attention to their opening and closing procedures and to limit the cash that tellers hold.

"There is the potential for extortion or kidnappings," he said.

The FBI also expects a rise in courier, armored-car, and ATM robberies, as well as computer fraud. But "a sound security system can have an impact," Mr. Conditt said.

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