The Reserve Bank of India (RBI) has allowed the banks to hike the fee charged on cash withdrawal beyond the permitted free ATM transaction limit from Rs 20 to Rs 21 per transaction, with effect from January 1, 2022.
Customers are eligible for five free transactions (inclusive of financial and non-financial transactions) every month from their own 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. Beyond the free transactions, the ceiling/cap on customer charges is Rs 20 per transaction.
“To compensate the banks for the higher interchange fee and given the general escalation in costs, they are allowed to increase the customer charges to Rs 21 per transaction. This increase shall be effective from January 1, 2022,” the RBI said in a notification on Thursday.
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 RBI had constituted a committee in June 2019 under the chairmanship of the Chief Executive, Indian Banks’ Association, to review the entire gamut of Automated Teller Machine (ATM) charges and fees with particular focus on interchange structure for ATM transactions.
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.
Source: IANS
