Reserve bank of India informed that it is not in the favor of the banks decision to increase the interchange fees charged by the banks for ATM transactions. Interchange fee is the fee that bank charges from another in case he uses the other bank’s ATM. The first three transactions at other ATMs are free and after this, the bank can choose to pass on the cost to the consumer.
Highlighting the issues RBI stated that already the number of free transaction is going to be reduced in addition to this increased interchange fee might create inconvenience. Presently Rs 15 is charges as the interchange fees, and it is expected to increase up to Rs16.50 plus 12% service tax making a total of Rs 18.48.
RBI is not in favor of increasing these charges at the moment. Lately RBI had permitted banks to charge customers for using home-bank ATMs for more than five transactions a month. The banks wanted the RBI to let them increase the charges so that they can easily get the enough money to equip the proper surveillance systems across the ATMs for proper security.