Mumbai, Dec 7 (PTI) Analysts today said the ReserveBank move to reduce merchant discount rate (MDR) on debitcards is negative for acquiring banks like HDFC Bank and AxisBank in the short-term as the surge in volumes is unlikely tomake up for the losses.
"Volume is unlikely to make up for the shortfall inreduction of fees in the short-term and hence, the near-termimpact would be marginally negative for a few players likeAxis, HDFC, ICICI and SBI," analysts at domestic brokerageKotak Securities said in a note.
Their peers at American brokerage Morgan Stanley saidthe move can cause a revenue impact of up to 0.3 per cent onthe four lenders and a dip in profitability of up to 1.1per cent.
However, both the notes welcomed the move as beingpositive, and in the right direction which will help in thelong-term.
At present, banks are allowed to charge up to 0.75 percent as the MDR for transactions up to Rs 2,000 and 1 per centfor other ones. The new guidelines issued yesterday areapplicable from January 1, and make a shift in the structureto basing the charges on the size of the merchant.
Debit card transactions at merchants with turnover ofup to Rs 20 lakh will attract an MDR of 0.40 per cent with acap of Rs 200 per transaction, while the same at others willbe 0.9 per cent with a cap of Rs 1,000.
According to RBI Deputy Governor B P Kanungo, the moveis aimed at increasing the stagnant debit card transactionsbut will also make sure that the acquirers get sufficientlycompensated for investing in the infrastructure.
It can be noted that earlier this year, economists atthe country's largest lender SBI had come out with a studypegging the overall losses for lenders due to the push on thedigital front. PTI AA DSKDSK.
This is unedited, unformatted feed from the Press Trust of India wire.