Increasing non-interest income in banks from the use of credit and debit cards in ATMS: A novel approach

Most of the online banking channels have a favourable impact on the fee based ROA and ROE of both SBI and ICICI; except for the use of credit and debit cards in ATMs; Guha et al (2020). In this paper, regression model has been used to show the impact of use of credit and debit cards at ATMs on the commission, excise and brokerage of both banks; and a multiple regression model has been developed which will help in increasing fee-based income from the use of credit and debit cards in ATMs. This has important implications for the banking sector as well as the government; because, online banking channels contribute directly towards commission, exchange and brokerage of banks and these are a major source of non-interest income. Fees on the use of credit cards and debit cards in ATMs are levied on the basis of the number of transactions. However, no fees are levied on the basis of the amount of transactions. This lacuna that exists in the banking system demands attention. The aim of this paper is to make appropriate suggestions to increase the fee-based income from the use of credit and debit cards in ATMs.