RBI constitutes VG Kannan Committee to review ATM chargesDate: 12 June 2019 Tags: Banking Committees
The Reserve Bank of India (RBI) has set up six member committee under VG Kannan, Chief Executive Officer of the Indian Banks’ Association (IBA) for giving fillip to Automated Teller Machines (ATM) deployment in unbanked areas. It is mandated to review entire gamut of ATM charges and fees.
Composition: Chief Executive of Indian Banks’ Association VG Kannan will chair of the committee. Its members will consists of senior officers from National Payments Corporation of India (NPCI), SBI, HDFC Bank, Confederation of ATM Industry and Tata Communications Payment Solutions Limited.
Terms of Reference for the Committee
- It will review existing structures and patterns of costs, charges and interchange fees for ATM transactions.
- It will review overall patterns of usage of ATMs by cardholders and assess the impact, if any, on charges and interchange fees.
- It will assess entire gamut of costs in respect of ATM ecosystem and make necessary recommendations on the optimal charge or interchange fee structure and pattern.
- It will submit its report within two months from the date of its first meeting.
Banks and white-label ATM operators (WLAOs) are demanding RBI to raise ATM interchange fee from Rs 15 to Rs 18 for cash withdrawals and card-to-card fund transfers and Rs 5 to Rs 8 for other non-financial transactions to deal with the increased cost of operating ATMs. Interchange Fee is fee bank has to pay to other banks when its customer transacts at another bank’s ATM.