Host Bank refers to the bank that owns and operates an ATM or financial service terminal where a customer conducts a transaction. It is the bank that provides the infrastructure and maintenance for the ATM or branch, even if the user is not a direct customer of that bank.

In simpler terms, if you use an ATM belonging to a different bank than yours, that ATMís operating institution is called the host bank. Your own bank, in this case, is referred to as the issuing bank, since it issued your debit or credit card. For instance, if you hold an account with Bank A and withdraw money from an ATM of Bank B, then Bank B is the host bank, while Bank A is the issuing bank.

The host bank plays an essential role in facilitating interbank transactions. It enables customers of other banks to access cash, check balances, or perform other banking operations through its ATM network. For such transactions, the host bank may charge an interchange fee to the issuing bank, which sometimes gets passed on to the customer after free transaction limits are exhausted.

From a regulatory perspective, the Reserve Bank of India (RBI) has established clear guidelines governing ATM usage, interoperability, and the number of free transactions allowed per month to ensure fair and transparent banking practices.

In summary, the host bank is the financial institution that provides the physical or electronic infrastructure for conducting banking transactions. It ensures connectivity between different banks, supports ATM interoperability, and enhances customer convenience across the banking ecosystem.