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