RBI forms panel to review ATM Interchange Fee Structure
RBI has constituted the committee to examine the entire gamut of ATM charges and fees.
In a bid to give a fillip to the ATM deployment in the unbanked areas, the Reserve Bank of India (RBI) has formed a committee to review the ATM interchange fee structure. The decision in this regard was announced in the Part ‘B’ of the second bi-monthly Monetary Policy for the year 2019-20 on June 6, 2019 by the apex bank. Accordingly, the RBI has constituted the committee to examine the entire gamut of ATM charges and fees, said an RBI statement today.
According to the statement, the committee will have VG Kannan, Chief Executive of Indian Banks’ Association, as Chairperson, while other members will include: Dilip Asbe, Chief Executive Officer, National Payments Corporation of India; Giri Kumar Nair, Chief General Manager, State Bank of India; S Sampath Kumar, Group Head, Liability Products, HDFC Bank Ltd; K Srinivas, Director, Confederation of ATM Industry; and Sanjeev Patel, Chief Executive Officer, Tata Communications Payment Solutions Ltd.
The terms of reference of the committee are given below, according to RBI:
1. To review the existing structures and patterns of costs, charges and interchange fees for ATM transactions.
2. To review the overall patterns of usage of ATMs by cardholders and assess the impact, if any, on charges and interchange fees.
3. To assess the entire gamut of costs in respect of the ATM ecosystem.
4. To make recommendations on the optimal charge/interchange fee structure and pattern.
5. Any other item relevant to the above.
Notably, the committee may submit its report within two months from the date of its first meeting.
Earlier on June 6, the Reserve Bank of India has cut the key lending rate by 25 bps. Issuing a statement, the RBI said, "On the basis of an assessment of the current and evolving macroeconomic situation, the Monetary Policy Committee (MPC) at its meeting today decided to: reduce the policy repo rate under the liquidity adjustment facility (LAF) by 25 basis points to 5.75 per cent from 6.0 per cent with immediate effect. Consequently, the reverse repo rate under the LAF stands adjusted to 5.50 per cent, and the marginal standing facility (MSF) rate and the Bank Rate to 6.0 per cent."
The apex bank has also announced to remove charges on NEFT and RTGS transactions. Industry experts and economists welcomed the latest RBI policy decisions, especially the NEFT/RTGS fee waiver.