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The interchange fee -- paid by the card-issuing bank when a customer swipes at another bank's ATM, including at white-label ATMs -- may be raised to Rs 20 to Rs 23.
The cost structure of automated teller machine (ATM) channels is likely to get an update.
The interchange fee -- paid by the card-issuing bank when a customer swipes at another bank's ATM, including at white-label ATMs -- may be raised to Rs 20 to Rs 23.
Higher cash withdrawals, meanwhile, may soon attract an additional convenience charge.
Also, differential pricing may be deployed for customers in underpenetrated centres to aid withdrawals by direct benefit transfer (DBT) beneficiaries.
This is part of the recent deliberations between the Confederation of ATM Industry (Catmi) and the Reserve Bank of India.
It comes amid fresh orders for ATMs and cash recycling machines hitting 45,000 between September 2023 and March 2024.
The figure is nearly a sixfold increase over the preceding comparable period. This is also more than the 225,000 ATMs set up between demonetisation in November 2016 and the current tally of 260,000.
In effect, the report of the Committee to Review the ATM Interchange Fee Structure is back in play.
The RBI had constituted the committee to give a fillip to ATM deployment in unbanked areas.
The panel, headed by Indian Banks Association's then CEO V G Kannan, had submitted its report to the banking regulator on October 22, 2019.
"We expect the revisions to come through once the new government is sworn in (after the 2024 general elections)," said a source.
The interchange fee was raised to Rs 17 from Rs 15 for financial transactions and to Rs 6 from Rs 5 for non-financial transactions, effective August 1, 2021.
But the current interchange fee at Rs 17 is lower than Rs 18 in 2012, when it was cut to Rs 15.
"Costs have gone up because of rentals, fuel costs, cash-loading charges, and adherence to the ministry of home affairs' security protocols," said an industry veteran.
The RBI's decision to withdraw Rs 2,000 currency notes from circulation has also led to more trips to load ATMs with cash.
The Kannan Committee had batted for a review of interchange and customer ATM usage charges at stipulated intervals to be decided by the RBI to do away with cost-linked logjams.
While the industry was ready to settle for an interchange fee of Rs 20, some say this may now have to move up to Rs 23 to adjust for cassette-swap costs.
Cassette swaps are a lockable mechanism that does away with open cash replenishment The Kannan Committee had pointed out that implementing cassette swaps could add 15 per cent in additional costs.
And, 'if cassette swap is to be implemented, then a commensurate increase in ATM usage charges and ATM interchange should be considered appropriate,' it said.
Incidentally, nearly a year after the rollout of cassette swaps at ATMs was set in motion, it remains only on paper.
The four-phased plan across 30 cities was to cover the entire network of 260,000-odd ATMs in the country by FY24.
Another extension -- the fourth in a row -- may now be sought from the RBI.
The idea of cassette swaps at ATMs came up six years ago (April 2018) and the first deadline was FY21.
Feature Presentation: Ashish Narsale/Rediff.com
