Withdrawing cash from bank ATM soon to become costly as India's ATM operators' association has written to the Reserve Bank of India (RBI) seeking a hike in the interchange fee paid by customers. In the letter, ATM operators told RBI that their businesses will 'bleed'.
According to ET reports, the RBI’s increased compliance standards on security and maintenance has increased the cost of running the teller machines without a corresponding increase in the revenues these companies make through fees accrued.
At present, the interchange fee has been set by RBI at Rs.15 per transaction with a cap of five free transactions per customer.
“The continued bleeding is not only impacting the viability of ATM businesses but has significantly slowed down new rollouts both by banks and white label ATM operators,” said the February 13 letter addressed to a senior RBI executive.
“In the meanwhile, RBI has been relentless in demanding implementation of various compliance/control measures such as the rollout of EMVs etc which is further impacting the sustainability of industry players.”
For urban areas where the population is more than 1 million the ATM committee has recommended an interchange fee of Rs 17 on financial and Rs 7 on non-financial transactions.
For rural and semi-urban areas where the population is less than 1 million, the committee has recommended an interchange fee of Rs 18 for financial and Rs 8 for non-financial transactions, while free transactions could be six.