Is RBI planning to wave off ATM charges too? Central bank forms review panel after removing NEFT, RTGS fees

In its June bi-monthly monetary policy meeting, RBI had said that it would constitute a committee to review the ATM interchange fee structure with a view to speed up ATM deployment in the unbanked areas.

RBI has asked the committee to submit its reports within two months. (File Photo/ Getty)

New Delhi: Days after the Reserve Bank of India (RBI) removed charges levied against National Electronic Funds Transfer (NEFT) and Real-time Gross Settlement (RTGS) and directed banks to pass on the benefits to customers, a committee has been formed to examine the gamut of charges taken against the withdrawal of money from Automated Teller Machines (ATMs). The Central bank has asked the committee to submit its reports within two months. In its June bi-monthly monetary policy meeting, RBI had said that it would constitute a committee to review the ATM interchange fee structure with a view to speed up ATM deployment in the unbanked areas. As per reports, the committee is headed by V. G. Kannan, Chief Executive, Indian Banks' Association. The other member of the committee includes 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, K Srinivas Director, Confederation of ATM Industry, Sanjeev Patel, Chief Executive Officer, Tata Communications Payment Solutions. The constituted committee has been instructed to review the existing structures and patterns of costs, charges and interchange fees for ATM transactions, an official RBI statement said. It would also review the overall patterns of usage of ATMs by cardholders and assess the impact, if any, on charges and interchange fees. The committee will assess the entire gamut of costs in respect of the ATM ecosystem. The Central bank has also asked the committee to make recommendations on the optimal charge/interchange fee structure and pattern and any other item relevant to the above. RBI on June 6 said that it has done away with charges on fund transfers through RTGS and NEFT routes to boost digital transactions and asked banks to pass on the benefits to customers. RTGS is meant for large-value instantaneous fund transfers while NEFT System is used for fund transfers up to Rs 2 lakh. Country's largest bank SBI charges between Re 1 and Rs 5 for transactions through NEFT and between Rs 5 and Rs 50 for RTGS route. "In order to provide an impetus to digital funds movement, it has been decided to do away with the charges levied by the RBI for transactions processed in the RTGS and NEFT systems," RBI had said.