MUMBAI : A Reserve Bank of India (RBI) panel on ATM fees has recommended charging customers for every cash withdrawal above ₹5,000, a right to information (RTI) petition revealed. RBI is yet to publish the report, which was released after petitioner Srikanth L. filed a request.
“To discourage high cash withdrawals from ATMs, only cash withdrawal transactions up to (and including) ₹5,000 to be considered for free transactions. Banks may levy charges on the customer for every individual transaction above ₹5,000," the report said.
RBI had set up the panel to review ATM charges in June 2019, led by V.G. Kannan, who was chief executive of the Indian Banks’ Association at the time. It submitted the report on 22 October, but RBI did not release it.
When the petitioner sought the report under RTI, RBI’s public information officer rejected it on the grounds that it was held by RBI in fiduciary capacity and, hence, was exempt under Section 8 (1) (e) of the RTI Act. However, when the petitioner appealed the decision, RBI’s appellate officer released the report. Mint has seen a copy of the report, made available by Srikanth.
According to the panel, the cost of operating ATMs has gone up whereas interchange fees and the cap on customer ATM usage charges has not been reviewed since 2012 and 2008, respectively. It also expressed concern over the lack of new ATM deployments, especially in semi-urban and rural centres.
ATM interchange fee is paid by the bank that issues the card, called the issuer, to the bank ATM where cash is withdrawn, called the acquirer. This charge is split between the acquirer and the company maintaining the ATM, which is why banks discourage customers from using other banks’ ATMs.
The report recommended using population as a metric for calculating ATM charges.
That apart, the panel is in favour of increasing the upper limit of customer charges by 20% to ₹24 plus taxes, per transaction after the expiry of the free usage limit.
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