Your bank ATM charges all set to go up soon
If you frequently make transactions via your bank ATM debit card, here is some very bad news. After Reserve Bank of India’s fresh directive on reconfiguring bank ATM machines, banks have sought permission from the central bank to increase the ATM transaction charge as reconfiguring cash vending machines will increase their cost by at least 25 per cent.
The banks have requested RBI to allow them to revise bank ATM charges starting July 31.
On June 21, RBI had issued a circular mandating control measures for ATMs and also to reconfigure the machine cassettes to accommodate the new set of banknotes coming to the markets.
The ATM deployer industry is crying foul over the mounting losses as the transaction fee is only Rs 15, which was fixed in 2012. Meeting the RBI directive is expected to increase their operational cost by 40 per cent, said the Confederation of ATM Industry (CATMI).
“The white-label ATM operators are already under tremendous financial stress and the cost of additional investments required to meet the RBI stipulated security standards will further increase their transactions cost by at least 25 per cent, CATMI director general Lalit Sinha told PTI earlier this week.
Citing financial burden, thus, banks have put forth RBI a proposal to reduce number of free ATM withdrawals each month. At present, 8 ATM transactions are free of cost each month – five via own banks’ ATM and three via other banks’ ATM. Besides, banks also suggested hiking the transaction charges to Rs 25 from Rs 15 now.
“The cost of a transaction on ATM works out to be Rs 23 for a 150 hits/day ATM. Against this, the interchange fee that the acquiring bank/white-label ATM operator gets is only Rs 15,” informed Lalit Sinha of CATMI.
Sinha highlighted a couple of more issues and pointed out that RBI should take all the stakeholders including banks and ATM service providers into consideration to find out the way forward to ensure compliance to the newly announced measures.
As banks, especially the state-run banks, are rapidly shutting down ATMs, the debit card to ATM ratio has gone up especially in semi-urban and rural areas, noted Sinha. This increases the investment burden on the industry players. He suggested banks should come forward and fund this “in the form of an increase in the interchange fee paid by the card issuers to the ATM deployers”. Else we will continue to see a lull in expansion of the ATM network, Sinha said.