BENGALURU/KOLKATA: While digital payments has now been a battle ground for banks and payment companies vying for a larger share, new strife is brewing between public and private sector banks. United Bank of India, the Kolkata-based public sector lender, stopped Aadhaar Enabled Payment System (AEPS) from April for its users on devices installed by new-generation banks like IDFC Bank, IndusInd Bank, RBL Bank and YES Bank alleging round tripping by their business correspondents (BCs).ET has learnt that these private banks recently wrote to the National Payments Corporation of India (NPCI), which manages the payment railroad, complaining about the move by United Bank and NPCI has forwarded the letter to Reserve Bank of India seeking the regulator's intervention.“AEPS transactions are mainly done by citizens of far-off areas where there are not many branches or ATMs. Ths arbitrary move by the public sector bank is causing trouble for banking customers withdrawing cash from our micro ATMs,” said a senior banker of one of the private sector banks affected by the shutdown. “We also do not understand why we have been singled us out as micro ATMs are deployed by every bank.”Another banker said that though his bank has taken the matter up with NPCI, nothing has moved so far.“Business correspondents were resorting to round tripping of funds through the micro ATMs and earning commission for each transaction in the process, which is causing us paying huge sums to private banks who have deployed these terminals,” said a senior public sector banker on the condition of anonymity.He said some banks have had to cough up about Rs 1 crore in interchange fee in the March quarter while earning just about Rs 4000 as interchange from other banks. Interchange fee is the service fee that one bank pays to another when the former’s customer does a transaction on a terminal of the latter bank.Another senior banker in the know of the matter said that government banks opened the maximum number of Jan Dhan accounts from customers in far flung rural areas. These customers mostly get subsidy money into their bank accounts and rely on micro ATMs to withdraw cash.“We have seen in some cases as many as 20 account credits and simultaneous debits in a single day which is not normal customer behaviour,” said another senior banker with a public sector bank.For every transaction, an interchange of 0.5% or Rs 15, whichever is lower, is paid to the bank whose micro ATM is used. A share of this interchange goes as commission to the retail partner or business correspondent in the field.“These BCs do Rs 3000 credit and debit since that is the optimum amount that helps the interchange to reach Rs 15 per transaction and they get the maximum allowed commission,” said the banker quoted above.A top executive of a private bank said banks can take penal action against accounts where such kind of debits and credits are happening under the money laundering guidelines.“Instead of blocking AEPS transactions, they should first take action against errant customers whose accounts are showing such transactions,” he said.While AEPS was designed to drive financial inclusion and get consumers in far flung areas undertake digital transactions, it has remained embroiled in controversy from the onset with interchange being the prickly issue.