Banks vs ATM operators: NPCI recommends a hike in interchange fee

The National Payments Corporation of India (NPCI) has recommended a hike in the interchange fee for cash withdrawals, according to a letter accessed by Business Standard. This comes when the cash-management industry is facing a surge in additional costs because of security guidelines issued by the Reserve Bank of India (RBI) and the Ministry of Home Affairs (MHA).

Interchange fee is the amount charged by ATM operators for every transaction.

The MHA guidelines — which include requirements such as GPS-enabled vans, and rules on timing, number of personnel and their training — came into force on Friday. However, the industry