Limit ATM cash withdrawals to ₹5,000 and increase ATM charges, an RBI committee reportedly recommends
Reserve Bank of India( RBI) committee has recommended limited ATM cash withdrawalsto ₹5,000.
- It also recommends increasing the charges for withdrawing larger amounts and on withdrawals in excess of
- The committee justifies that the cost of operating ATMs has increased whereas interchange fees haven’t been reviewed since 2012 and the cap on ATM usage charges has not budged since 2008.
Currently, customers can withdraw ₹10,000 in a single transaction and ₹20,000 in a day from a State Bank of India (SBI) ATM. For other banks, the single transaction and daily withdrawal limit is different from card to card. For ICICI Bank, the daily withdrawal limit could range from ₹50,000 to ₹1.5 lakh.
TOP VIDEOS FOR YOU
The committee was appointed by the RBI in its monetary policy announcement in June 2019 to review the ATM interchange fee structure.
AdvertisementIn the RTI filed by Srikanth L, the committee justifies that the cost of operating ATMs has increased whereas interchange fees haven’t been reviewed since 2012 and the cap on ATM usage charges has not budged since 2008.
Even though the committee has submitted its recommendations, there is no update on whether the RBI has accepted them.
How much more expensive is it going to be to use ATMs?
According to the report, the charge for financial transactions — over and above free transactions — should be increased by 16% from ₹15 to ₹17. For non-financial transactions, like balance enquiry or PIN change, the charges should be increased from ₹5 to ₹7.
Even though the committee has also recommended increasing the number of free transaction from five to six in areas that have a population of less than 1 million — it has also recommended increasing charges by 24% on a blended basis. So financial transactions would cost ₹18 instead of ₹15 and non-financial transactions would increase from ₹5 to ₹8.
"While the recommended changes as above in interchange do not cover the complete cost per transaction, it is felt that given the asymmetry in acquiring and issuing transaction volumes, a via media needs to be arrived at between issuing banks and acquiring banks,” the committee said in its report.
Other members of the committee included the CEO of National Payments Corp of India (NPCI) Dilip Asbe, chief general manager of State Bank of India (SBI) Giri Kumar Nair, group head for liability products at HDFC Bank S Sampath Kumar, director of Confederation of ATM Industry, K Srinivas, and Sanjeev Patel, CEO of Tata Communications Payment Solutions Ltd.
Indian banks have made $3.1 billion just by parking funds with the RBI — instead of giving them out as loans
How to withdraw cash from ATM without debit card
RBI tells banks to assign 'zero' risk for emergency loans to MSME