ATM-body urges RBI to correct fee structure to curb losses
Confederation of ATM Industry (CATMI) sought immediate regulatory intervention to correct the fee structure in the loss-making ATM deployer industry. It said RBI's latest direction to reconfigure ATMs will increase their cost by at least 25%, leaving them unviable. "Meeting the RBI directive will be contingent solely on banks taking on additional cost, as this will increase their operational cost by 40%," CATMI said.
What does the RBI notification say?
On June 21, RBI had issued a circular to mandate control measures for ATMs and also to reconfigure the machine cassettes to accommodate the new set of banknotes coming to the markets.
ATM operators get Rs. 15 only as transaction fee: CATMI
CATMI Director General Lalit Sinha said, "RBI should take all stakeholders including banks, ATM service providers into consideration to find out the way forward to ensure compliance to newly-announced measures." He said, "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 acquiring bank/white-label ATM-operator gets is only Rs. 15."
Meeting RBI directive will increase operational cost by 40%: CATMI-DG
According to Lalit Sinha, the recent compliance-related directives by the RBI such as cash management/logistics, cassette swap, etc. will demand a sizable investment that may account for up to 40% of the cost of ATMs. Sinha said, "With this additional cost of compliance and cash management costs, future deployments may come to a grinding halt unless interchange is increased on a priority basis."
ATM growth already at standstill, claims Sinha
ATM growth is already at a standstill while the card issuance continues to be aggressively powered by Jan Dhan scheme and other initiatives. As state-run banks are rapidly shutting down ATMs, the debit card to ATM ratio went up especially in semi-urban and rural areas.
The transaction fee not revised since 2012, says Sinha
"The interchange fee of Rs. 15 on cash and Rs. 5 on non-cash transactions is constant and not revised since 2012 despite repeated requests," Sinha said. "The banks should come forward and fund this in the form of an increase in interchange-fee paid by the card-issuers to ATM deployers, else we'll continue to see a lull in the expansion of ATM network," Sinha said.
