Page 7 - Banking Finance July 2019

RBI CORNER

RESERVE BANK

RBI to review ATM charges
RBI makes RTGS/NEFT
A committee has been set up by RBI to review the ATM interchange fee. Based
transfers free
on the recommendation during the second bi-
RBI has announced that it has de-
monthly monetary policy, the committee has
cided to do
been formed. The existing structures and pat-
away with the
terns of costs, charges and interchange fees
charges on
for ATM transactions, the overall patterns of
fund transfers
usage of ATMs by cardholders and the impact
through RTGS
on charges and interchange fees, the entire
and NEFT routes with an aim of
gamut of costs in respect of the ATM ecosystem will be reviewed by RBI. Ac-
boosting digital transactions and
cordingly, it will make recommendations on the optimal charge and inter-
asked banks to pass on the benefits
change fee structure and pattern.
to customers.
The committee will require submitting its report within two months from the
RBI in his statement has emphasised
date of its first meeting. The RBI has recommended certain security features
that in turn the banks will need to
for ATMs such as cash replenishment only with digital one-time combination
pass on the benefits to their custom-
(OTC) locks, grouted structure and comprehensive e-surveillance mechanism at
ers. However, after RBI comes out
the ATMs to ensure timely alerts and quick response.
with a circular on this, clarity on the
The interchange fee is likely to be revised upward. Himanshu Pujara, MD,
extent of the cut for bank custom-
Euronet Services India Pvt Ltd said, “Interchange fee is always an interbank fee.
ers will emerge.
It is paid by the issuing bank whose cardholders use the ATM of another bank —
RTGS is meant for large-value instan-
the acquiring bank. There is no real fee that is passed on to the consumer. Of
taneous fund transfers, while NEFT
course, the customer pays if she crosses the number of free transactions, which
system is meant for fund transferring
is three in metros and five in non-metros."
up to Rs 2 lakh.
However, ATM service providers say the impact will not affect consumers im-
The central bank charge banks a
mediately considering the country is looking at promoting digital transactions.
minimum amount for transactions
“As a consumer, you will not see a major impact if there is a revision in the in-
routed through these systems for
terchange fee. Some day the cost will have to get passed on to the consumer.
fund transfers. Accordingly, banks
We all had subsidy in petrol and we were paying Rs 40 and overnight it changed
levy charges on their customers.
to Rs 70. We can’t live in the economy of subsidy for too long. If there is a con-
SBI charges between Re 1 and Rs 5
venience, customer has to pay for it. The only reason they might not pass on to
for transactions through NEFT and
the consumer now is because they want to promote digital transaction," said V
between Rs 5 and Rs 50 for RTGS.
Balasubramanian, president, Merchant & Terminal Business, FSS.
BANKING FINANCE | JULY | 2019 | 7