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ATM operators seek higher 'interchange rates', customers may be hit
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SME Times News Bureau | 19 Apr, 2018
Bank customers may be hit as ATM operators have demanded higher
"interchange rates" for ATM transactions to enable them to comply with
recent stringent RBI guidelines, an industry body said here on
Wednesday.
Presently, all banks charge a fee of Rs 15 for each
cash and Rs 5 for all non-cash transactions from each other for use of
their ATMs by other banks' customers -- which is recovered from the
(user) customers -- beyond the five minimum free transactions.
Now,
the Confederation of ATM Industry (CATMi) has demanded that this should
go up by at least Rs 3-5 per transaction to enable the (ATM) operators
to recover their costs which have skyrocketed in recent times.
CATMi
Director K. Srinivas said that recently the RBI has issued guidelines
that will result in overall cost hike for the ATM service providers.
Among
these, the RBI said banks must implement certain minimum standards in
their arrangements with the service providers for cash
management-related activities by July.
These include a minimum
fleet size of 300 specifically fabricated cash vans (vehicles), a
driver, two custodians and at least two gunmen for security, each
vehicle must be GPS-enabled and monitored live with geo-fencing mapping
with additional indication of the nearest police station during any
emergency.
Besides, the RBI stipulates that ATM operations should
be performed only by certified personnel who have completed minimum
hours of classroom learning and training among others.
"These can
substantially increase the costs of operations for all the 19 CATMi
members, and banks will have to pay for the costs of the increased
compliance. Where there is a pay-per-use model, the issuer bank pays the
increased per transaction fee for its cardholders transacting on other
banks ATMs," CATMi spokesperson V. Balasubramanian told IANS.
Another
RBI circular that has created concerns pertains to banks considering
using lockable cassettes in the ATMs which would be swapped at the time
of cash replenishment in order to reduce risks involved in existing
method of open cash replenishment or top-up.
"There are more than
230,000 ATMs operational all over India, each with four cassettes to
store the cash in denominations of Rs 2,000, Rs 500, Rs 100 and Rs 50.
The swap of cassettes would entail a massive investment by the ATM
service providers, as additional cassettes must be available for all
ATMs instead of using the same cassette," Balasubramanian said.
However, for this, the RBI has given time up to March 31, 2021, covering one-third of the ATMs each year till then, he added.
Though
Srinivas welcomed the RBI guidelines, he urged the apex bank and the
National Payments Council of India to immediately increase the
interchange rates in order to make this viable for the ATM services
industry.
"We are already burdened with higher costs of Euro
Master Visa protocol and Biometrics implementation. Now, the added costs
of cash management will make the operations unviable for Bank ATM
operators and White Label ATM operators, and will force closure of
several ATMs."
Another CATMi Director Himanshu Pujara said that
an interchange rate below the cost of servicing each transaction would
mean that expansion of ATMs to the semi-urban or rural areas could
suffer.
"CATMi is in discussions with the RBI and the NPCI and
hopes that a decision to increase the interchange rate is taken up on
priority," he said.
Presently, through the 230,000 ATMs, an
average minimum of one million transactions of varying cash amounts take
place daily, worth several thousands of crores of rupees.
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