Charging for ATM services could push customers to bank counters: Takru

A top Finance Ministry officialtoday favoured free ATM services as existing now, saying ifthey are priced, customers could flock to bank counters whichis more expensive than running the money dispensing machines.

Stating that no banks have so far approached thegovernment seeking approval to raise ATM fees, financialservices secretary Rajiv Takru said a final decision will haveto be taken by the Reserve Bank in this regard.

“As far as I am concerned I would very much like ATMservices to be free. If banks make the services expensive thencustomers will probably end up at the bank windows. A tellerservice is far more expensive than ATM service,” Takru toldreporters after inaugurating the banking technology expo.He also called for a re-look at orders of some stategovernments asking banks to have round-the-clock security atATMs.

[caption id=“attachment_1320167” align=“alignleft” width=“380”] Representational image of an ATM. AFP[/caption]

However, admitting that ATM services should besustainable, he said banks will have to look at the economicsof this and encourage customers to use ATMs more is one ofthe ways to make them profitable.

Notably, after an attack on a Corporation Bankemployee at an ATM in Bangalore last November, many stateswant round-the-clock security at all the ATMs.Banks’ umbrella body IBA met last month and calculatedthat this will incur an additional Rs 40,000 per ATM per monthand will push this vertical of banks into more losses.

The IBA has asked RBI to cap the number of freetransactions to five per month across any ATM network from thecurrent practice of giving them unlimited transactions at ownbank ATMs and five at other bank ATMs. From sixth transactiononwards, the banks charge a customer Rs 20 per transaction.Banks net-off the transactions at the back-end and payRs 15 plus taxes for every transaction, which is theinterchange fees.

Following this, the National Payments Corporation,which is the national body handling the payment switch system,convened a meeting of banks last week and formed a committeeof six banks to offer suggestions around cost management andcharges for use of the ubiquitous machines.

The members of the panel are State Bank of India, Bankof Baroda, Punjab National Bank, ICICI Bank, Axis Bank andHDFC Bank, and will submit their report in a month.

PTI