RBI Sets up Committee to Review ATM Charges
The Reserve Bank of India (RBI) has set up a committee under VG Kannan, Chief Executive Officer of the Indian Banks’ Association for giving a fillip to ATM deployment in unbanked areas.
Terms of Reference for the Committee
- Reviewing the existing structures and patterns of costs, charges and interchange fees for ATM transactions.
- Reviewing the overall patterns of usage of ATMs by cardholders and assess the impact, if any, on charges and interchange fees.
- Assess the entire gamut of costs in respect of the ATM ecosystem and make necessary recommendations on the optimal charge/interchange fee structure and pattern.
Why the Committee has been set-up?
Banks and white-label ATM operators (WLAOs) are demanding the RBI to raise ATM interchange fee from Rs 15 to Rs 18 for cash withdrawals and card-to-card fund transfers, and from Rs 5 to Rs 8 for other non-financial transactions to deal with the increased cost of operating ATMs, want the RBI.
Interchange Fee is the fee the bank has to pay to other banks when its customer transacts at another bank s ATM.