New Delhi: The Reserve Bank of India (RBI) has raised its concerns over the emerging 'cartelization' tendency among the ATM network of various banks. RBI feels that the banks in India are charging excessive fees from the customer for inter-bank ATM transaction charges on the pretext of recovering the technology costs.
In actual scenario, the inter-bank transaction charges incurred by various banks are very less. The bank, which sets up a huge ATM network justifies the costs due to its heavy investments in the infrastructure, but the fact is that due to installation of ATMs, many transactions, which were earlier done over the counter and involved huge manpower are now possible without even visiting the banks. Customers who earlier lined up at the banks counters to withdraw cash, get statements now take recourse to ATMs for these purposes. This in effect has reduced the manpower requirement and eventually the efficiency that creeps in to the system offsets the investments to a considerable extent.
RBI also believes that banks offer a relatively low interest rates on deposits as compared to other instruments, and the customer definitely expects some free services from the banks. A need for regulation of the fees charged by banks on inter-bank ATM transaction charges is required so that the benefits of the advancement in technologies are passed on to the customers and they don't hesitate in using ATMs because of prohibitive charges.
RBI had earlier suggested to do away with the inter-bank transaction charges and enable customers to use other bank's ATM absolutely free for all transactions including cash withdrawal from April 1, 2009. Operations such as using the ATMs for balance inquiries should be made free as soon as possible. At present the spread of ATM networks both spatially and bank wise is very uneven and clusters of ATMs can be found at some places while rural areas have a very low spread of ATMs. The main hurdle in RBI's plan is the State Bank of India (SBI), having a huge network of ATMs which dwarfs most of the other banks. SBI feels that sharing the network without any fees will deplete its edge and the other banks will profit without making any comparable investments in technology.