Cash withdrawals from ATMs are set to become slightly heavier on the pocket from January as the Reserve Bank of India (RBI) announced new rules for users exceeding their monthly free transactions.
“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 ₹21 per transaction. This increase shall be effective from January 1, 2022,” the RBI said in a circular, revising it from the existing rate of ₹20 per transaction.
Th central bank said that the charges have been increased given the rising cost of ATM deployment and expenses pertaining to ATM maintenance.
Bank customers are eligible for five financial and non-financial free transactions from their own bank ATMs. At the same time, they will be able to make three cash withdrawals from other bank ATMs in metro cities and five from other banks in non-metro centres.
In June 2019, RBI had set up a committee under the chairmanship of the chief executive of Indian Banks' Association to review ATM charges and fees, especially focusing on the interchange structure for ATM transactions.
{{/usCountry}}In June 2019, RBI had set up a committee under the chairmanship of the chief executive of Indian Banks' Association to review ATM charges and fees, especially focusing on the interchange structure for ATM transactions.
{{/usCountry}}The RBI recently allowed the banks to increase interchange fees per transaction from ₹15 to ₹17 for financial transactions and from ₹5 to ₹6 for non-financial transactions across centres. The rule came into effect from 1 August, 2021.