The Reserve Bank of India (RBI) has announced an increase in interchange fees on ATM transactions, resulting in higher costs for cash withdrawals starting May 1, as reported by Doordarshan News. This revision is expected to impact frequent ATM users by increasing withdrawal expenses.
According to reports, customers will incur an additional charge of Rs 2 per transaction once they exceed their free withdrawal limit. Additionally, the non-financial transaction fee has been raised by Rs 1. Under the revised structure, cash withdrawals from ATMs will now cost Rs 19 per transaction, up from the previous Rs 17. Similarly, balance inquiries at ATMs will now be charged at Rs 7 per transaction, compared to the earlier Rs 6. The newly approved charges will also affect credit card benefits and savings account regulations.
These revised fees will only be applicable after customers surpass their free transaction limit. Currently, the limit stands at five free transactions per month at other banks’ ATMs in metropolitan cities and three transactions in non-metro areas.
The increase in ATM charges is part of an RBI-sanctioned revision following recommendations from the National Payments Corporation of India (NPCI). White-label ATM operators and banking institutions have long advocated for a fee adjustment, citing escalating operational costs that rendered previous fee structures unsustainable.
The revised transaction fees are expected to have a more significant impact on smaller banks, as they have a limited number of ATMs and rely on larger banks’ ATM networks for customer withdrawals. As a result, customers using ATMs outside their home bank’s network will experience an increase in cash withdrawal and balance inquiry costs.
The last revision in ATM withdrawal fees occurred in June 2021. This upcoming hike represents another adjustment in banking charges, affecting millions of customers across India.
