The Reserve Bank of India (RBI) has recently allowed banks to increase the charges on Automated Teller Machines (ATMs) to Rs 21 per transaction. Lenders can charge customers within this limit, once they have exhausted their free ATM withdrawals. The central bank said in a notification that this revised rate would be effective from January 1, 2022.
Customers are eligible for five free transactions every month from their own bank ATMThis includes both financial and non-financial transactions. Exceeding the limit, they will have to pay an additional amount of Rs 20 for each ATM transaction. Three free ATM transactions are allowed in metro cities and five in non-metro centers for customers using other bank’s ATMs for cash withdrawal.
The regulator has increased the charges for ATM transactions after almost seven years. “It is also observed that the last change in the interchange fee structure for ATM transactions was done in August 2012, whereas the charges payable by the customers were last revised in August 2014. Thus, the last change in these charges was made in August 2012. A lot of time has passed since then,” RBI said. in a notification.
In view of the rising cost of ATM deployment and maintenance charges by banks or white label ATM operators, the central bank has decided to increase ATM transaction charges. In June 2019, RBI constituted a committee to review the entire scope of ATM fees and charges, with a special focus on the interchange structure for ATM transactions.
Keeping in mind the need to balance the requirements of stakeholder entities and customer convenience, RBI has also increased the interchange fee from ₹15 to ₹17 for financial transactions and ₹6 to ₹5 for non-financial transactions. The new rates will be applicable from August 1, 2021. Interchange fee is a fee charged by banks to merchants processing credit card or debit card payments. “Applicable tax, if any, shall be payable additionally,” RBI said.
The instructions will also apply mutatis mutandis to transactions done at cash recycler machines (other than cash deposit transactions). The regulator said the RBI directive has been issued under section 10(2) read with section 18 of the Payment and Settlement Systems Act, 2007 (Act 51 of 2007).
state Bank of India (SBI) has recently revised the rules and charges for cash withdrawal from its ATMs and bank branches with effect from July. The new charges are applicable for Basic Savings Bank Deposit (BSBD) account holders. For BSBD account holders, there are four free cash withdrawals available every month – including ATMs and bank branches. The bank now charges Rs 15 plus GST on every transaction after the free limit. Cash withdrawal charges are applicable at home branches and ATMs and non-SBI ATMs.
The bank has also increased the cash withdrawal limit by customers at non-domestic branches. “To support its customers in this pandemic, SBI has increased the limit for non-domestic cash withdrawal through check and withdrawal forms,” the top lender said on Twitter.
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