Reserve Bank raises ATM transaction fees after 7 years
The RBI has said that the new hike rates will also apply to transactions made on cash recycler machines (excluding cash deposit transactions).
The Reserve Bank recently announced some changes in the rules for withdrawing money from ATMs. With the new announcements of the Reserve Bank will soon have to pay higher fees to withdraw money from ATM machines. This is because, from next month, banks are set to increase the interchange fee structure for ATM transactions. The Reserve Bank of India (RBI) has announced and given approval to banks to increase their transaction fees from August 1. The Reserve Bank of India (RBI) has hiked the transaction fee for financial transactions from Rs. Similarly, the transaction fee for non-financial transactions has been increased from Rs.5 to Rs.6.
The RBI has said that the new hike rates will also apply to transactions made on cash recycler machines (excluding cash deposit transactions). Interchange fees are the transaction fees that a customer must pay into a merchant’s bank account whenever he uses his credit or debit card. When a user makes a transaction at a non-bank ATM that holds the account. The bank issuing the card pays a transfer fee to the specified other ATM operator. At present, the bank pays the customer a transaction fee of Rs. 15 for each cash transaction and Rs. 5 for each non-cash transaction.
In this situation, the maintenance charges incurred by banks or white-label ATM operators are increasing. That is why the Reserve Bank has decided to raise ATM transaction fees. A panel was set up in 2019 to bring about a change in the transaction structure for ATM transactions. The team reviewed the full range of ATM fees and charges. The Reserve Bank of India has raised ATM transaction fees almost seven years later.
Customers can withdraw money up to five times a month for free from their own bank ATMs. This includes financial and non-financial transactions. Beyond this limit, the customer has to pay an additional Rs.20 for each ATM transaction when withdrawing money using ATMs. At the same time, customers who use other bank ATMs are allowed 3 free ATM transactions if Metro City, 5 free transactions at non-Metro ATM centers.
But now the Reserve Bank has increased the transaction fee for ATM cashiers from Rs 20 to Rs 21 per transaction beyond the above free limit. This new fee comes into effect from January 1, 2024. Meanwhile, from August, ICICI Bank customers will be able to avail the first 3 transactions (financial and non-financial) for free in six metro locations, including Chennai, in one month. The first five transactions will be free for customers elsewhere. It will charge Rs 20 from next month for financial transactions exceeding the free limit and Rs 8.50 for non-financial transactions. These charges are applicable to Silver, Gold, Magnum, Titanium, and Wealth cardholders.
