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Homechevron_rightBusinesschevron_rightATM transactions...

ATM transactions beyond free limit to be costlier from next year

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ATM transactions beyond free limit to be costlier from next year
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New Delhi: The Reserve Bank of India (RBI) on Thursday permitted lenders to increase charges for cash and non-cash automated teller machine (ATM) transactions beyond the free monthly permissible limit from next year.

As per the new rule which will come in effect from January 1, 2022, the customers will have to pay Rs 21 per cash withdrawal transaction after the limited free transactions which were Rs 20 earlier.

Customers are eligible for five free transactions (inclusive of financial and non-financial transactions) every month from their bank ATMs. They are also eligible for free transactions (inclusive of financial and non-financial transactions) from other bank ATMs viz. three transactions in metro centres and five transactions in non-metro centres.

The developments come after the central bank constituted a committee in June 2019 to review the entire gamut of Automated Teller Machine (ATM) charges and fees with a particular focus on interchange structure for ATM transactions.

In a notification issued on Friday, RBI announced that it is allowing lenders to increase the customer charges to Rs 21 per transaction to compensate the banks for the higher interchange fee and given the general escalation in costs.

The central bank has also allowed an increase in interchange fee per transaction from Rs 15 to Rs 17 for financial transactions and from Rs 5 to Rs 6 for non-financial transactions in all centres. This shall be effective from August 1, 2021.

The recommendations of the committee have been comprehensively examined. It has also been observed that the last change in interchange fee structure for ATM transactions was made in August 2012, while the charges payable by the customers were last revised in August 2014.

Accordingly, given the increasing cost of ATM deployment and expenses towards ATM maintenance incurred by the banks/white label ATM operators, as also considering the need to balance expectations of the stakeholder entities and customer convenience, the RBI has decided to increase the charges.

Following the hike in the ATM cash withdrawal fee, senior Congress leader Sachin Sawant, on Friday, slammed the Narendra Modi-led government. He took to Twitter and warned citizens to not be surprised if the Modi government will impose taxes for just looking at or touching money.

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TAGS:Reserve bank of india Atm transaction 
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