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RBI Committee Mulled Levying Charges On Withdrawals Over Rs. 5000

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As per the unreleased report secured the RTI query, it has come to light that RBI committee on ATM fees is considering levying charges on customers for every withdrawal amount over Rs. 5000.

RBI Committee Mulled Levying Charges On Withdrawals Over Rs. 5000
 

"To discourage high cash withdrawals from ATMs, only cash withdrawal transactions up to (and including) ₹5,000 to be considered for free transactions. Banks may levy charges on the customer for every individual transaction above ₹5,000," said the report of the committee led by then chief executive of the Indian Banks' Association, V G Kannan. The committee submitted the report to the RBI on October 22, 2019, but never made official.

At first when Srikanth L applied for the report under RTI, his request was rejected giving the rationale that the report was in hold of the RBI in fiduciary capacity. But later after an appeal against the Reserve Bank, the report of the committee for reviewing ATM interchange fee was later provided.

"Fiduciary capacity does not arise in this case, as the committee itself was formed by RBI and announced as part of Monetary Policy Committee on 6 June, 2019. This is a committee report and the same has to be made public, as with other committee reports of RBI," the first appellate authority had agreed with the appeal.

Further as per the report, there has not been a review since 2012 and 2008 of interchange fee as well as the cap of customer ATM usage fee. While there has been a surge in the cost of operating the ATM. Also, there was expressed concern around lack of new ATM installations in rural and semi-urban areas.

Also for arriving at ATM charges, the committee recommended usage of population as a measure. Say for instance for areas with population less than one million it suggested increasing number of free ATM transaction to 6 from the current 5 and similarly for capping those with higher population at 3.

 

And then after the free transactions are exhausted, the committee favour increasing the cap of customer charges by 20% to Rs. 24 plus taxes for each of the transaction.

GoodReturns.in

Read more about: atm cash
Story first published: Friday, June 19, 2020, 14:15 [IST]
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