RBI sets up six-mem­ber com­mit­tee to re­view ATM In­ter­change Fee struc­ture

The Hindu Business Line - - BANKING -

The Re­serve Bank of In­dia has set up a six-mem­ber com­mit­tee, headed by VG Kan­nan, Chief Ex­ec­u­tive, In­dian Banks’ As­so­ci­a­tion, to re­view the ATM in­ter­change fee struc­ture, with a view to giv­ing a fil­lip to ATM de­ploy­ment in un­banked ar­eas.

The com­mit­tee will re­view the ex­ist­ing struc­tures and pat­terns of costs, charges and in­ter­change fees for ATM trans­ac­tions. It will also re­view the over­all pat­terns of us­age of ATMs by card­hold­ers and as­sess the im­pact, if any, on charges and in­ter­change fees.

The com­mit­tee will as­sess the en­tire gamut of costs in re­spect of the ATM ecosys­tem and make rec­om­men­da­tions on the op­ti­mal charge/ in­ter­change fee struc­ture and pat­tern.

The five mem­bers of the com­mit­tee are: Dilip Asbe, Chief Ex­ec­u­tive Of­fi­cer, Na­tional The com­mit­tee will make rec­om­men­da­tions on the op­ti­mal charge/in­ter­change fee struc­ture and pat­tern

Pay­ments Cor­po­ra­tion of In­dia; Giri Ku­mar Nair, Chief Gen­eral Man­ager, State Bank of In­dia; S Sam­path Ku­mar, Group Head, Li­a­bil­ity Prod­ucts, HDFC Bank; K Srini­vas, Direc­tor, Con­fed­er­a­tion of ATM In­dus­try; and San­jeev Pa­tel, Chief Ex­ec­u­tive Of­fi­cer, Tata Com­mu­ni­ca­tions Pay­ment So­lu­tions.

The RBI said the com­mit­tee may sub­mit its re­port within two months from the date of its first meet­ing. To deal with the in­creased cost of op­er­at­ing ATMs, banks and white-la­bel ATM oper­a­tors (WLAOs) want the RBI to raise ATM in­ter­change fee from ₹15 to ₹18 for cash with­drawals and card-to-card fund trans­fers, and from ₹5 to ₹8 for other non-fi­nan­cial trans­ac­tions.

When a cus­tomer trans­acts at another bank’s ATM, his bank has to pay an in­ter­change fee to the other bank.

The num­ber of ATM de­ploy­ments de­clined by 544 dur­ing FY2020 to stand at 2,21,703 as of March-end 2019.

This de­vel­op­ment came in the back­drop of the Re­serve Bank of In­dia ask­ing banks and WLAOs to put in place mea­sures, in­clud­ing lock­able cas­settes in ATMs (which will be swapped at the time of cash re­plen­ish­ment), and up­grad­ing ATMs with sup­ported ver­sions of the op­er­at­ing sys­tem.

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