The bank deducts service charges @ 1.6% from the approved amount of Credit/Debit cards as per Merchant Establishment agreement executed between ICICI Bank and the firm and credits firm's MERCHANT CURRENT ACCOUNT maintained with Bank. Hence, relationship of Bank with firm as Consumer appears to have been established.
If yo are sure for the respite and are also sure that the service charges so collected by the bank are remitted to government, you can be confirmed to be a consumer hence entitled for a consumer grievance case against them before consumer disputes redressal forum.
A consumer is a person who hires or avails of any services for a consideration that has been paid or promised or partly paid and partly promised or under any system of deferred payment and includes any beneficiary of such services other than the person hires or avails of the services for consideration paid or promised, or under any system of deferred payment, when such services are availed of with the approval of the first mentioned person.
A complaint is an allegation in writing made by a Complainant, i.e., a consumer that he or she has suffered loss or damage as a result of any deficiency of service.
Deficiency of service means any fault, imperfection, shortcoming, or inadequacy in the quality, nature, or manner of performance that is required to be maintained by or under any law for the time being in force or has been undertaken to be performed by a person in pursuance of a contract or otherwise in relation to any service.
Now you can analyse next course of action in this regard.