ATM Withdrawal Alerts: From next month, bank customers with credit or debit cards will be eligible to pay an additional fee for cash withdrawal at ATMs across the country when the ATM withdrawal limit of their respective banks is exhausted. The Reserve Bank of India had earlier said in a notification that customers will have to pay even higher charges from January 2022 for ATM transactions when the limit is exceeded. Banks are already notifying this change to remind the customers. ATM transactions are set to be costly as RBI allowed banks to hike charges on cash and non-cash automated teller machines (ATMs) over and above the free monthly limit.
Once the changes are implemented, customers will have to pay Rs 21 per transaction at their own banks’ ATMs to withdraw money if they exceed the limit. At present, a bank customer pays Rs 20 per transaction if the same situation arises. Reserve Bank of India All the bank allows customers to do five free ATM transactions in their own banks before levying these rates. According to the central bank, the new rule will come into effect from January 1, 2022. However, all bank customers with debit cards will be eligible for five free transactions (cash or non-cash transactions) per month at their bank’s ATMs. Additionally, they will be eligible for three free transactions from other banks in metro cities and five free transactions in non-metro cities. RBI had notified about the changes in June this year.
What exactly did RBI say about ATM transactions?
“Customers are eligible for five free transactions (including financial and non-financial transactions) every month from their own bank ATMs. They are also eligible for free transactions (including financial and non-financial transactions) from other bank’s ATMs. Three transactions in metro centers and five transactions in non-metro centres. As per circular DPSS.CO.PD.No.316/02.10.002/2014-2015 dated August 14, 2014, in addition to free transactions, the maximum limit for customer charges is Rs.20 per transaction. In view of the higher interchange fee and general increase in cost, they are allowed to increase the customer charges up to Rs 21 per transaction. This increase will be effective from January 1, 2022,” the Reserve Bank of India said in a notification dated June 10, 2021.
The central bank further said, “These instructions will also be applicable to transactions done at cash recycler machines (other than cash deposit transactions), on which additional tax will be payable.
Banks notify customers about new rule
Few of the banks including HDFC Bank and Axis Bank have updated their website with the new notification.
“With effect from January 1, 2022, the ATM transaction fee rate exceeds the free limit of Rs. 20 + Taxes Revised Rs. 21 + Taxes, wherever applicable,” says HDFC Bank’s website.
“For transactions at HDFC Bank ATMs, only cash withdrawal transactions will be considered for charge. Non-financial transactions (balance enquiry, mini statement and pin change) will be free. For transactions at non HDFC Bank ATMs, the transactions to be considered for charges will include both financial (cash withdrawal) and non-financial transactions (balance enquiry, mini statement and PIN change).”
According to Axis Bank’s website, “With effect from January 1, 2022, the free limit plus financial transaction charges at Axis Bank or other bank ATMs will be INR 21 + GST.”
Earlier, RBI had last raised the transaction limit in August 2021 after a gap of seven years. It was observed that the last change in the interchange fee structure for ATM transactions was in August 2012, while the charges payable by the customers were last revised in August 2014.
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