ATM charges and fees will go up from Aug 2021

The Reserve Bank of India (RBI)  today (10.06.2021) allowed an increase in the interchange fee structure for ATM transactions considering the increasing cost of Automated Teller Machines (ATM) deployment and expenses towards ATM maintenance incurred by the banks and whiteATM operators. The last change in interchange fee structure for ATM transactions was in August 2012, while the charges payable by customers were last revised in August 2014.

At present, the card issuing bank pays an interchange fee of Rs.15 for each cash transaction and Rs.5 for each non-cash transaction to the other operators of the ATM when a customer makes a transaction at an ATM that does not belong to the card-issuing bank. As per revised guidelines of RBI, banks are allowed to increase in interchange fee per transaction from Rs.15 to Rs.17 for financial transactions and from Rs.5 to Rs.6 for non-financial transactions in all centres. This shall be effective from August 1, 2021.

The Reserve Bank of India had constituted a Committee in June 2019 under the Chairmanship of the Chief Executive, Indian Banks’ Association to review the entire gamut of Automated Teller Machine (ATM) charges and fees with particular focus on interchange structure for ATM transactions. RBI now revised the fees and charges after examining the recommendation of above committee.

 “A substantial time has thus elapsed since these fees were last changed. Accordingly, given the increasing cost of ATM deployment and expenses towards ATM maintenance incurred by banks / white label ATM operators, as also considering the need to balance expectations of stakeholder entities and customer convenience” RBI said.

The RBI has also said that customers will be eligible for five free transactions, which includes financial and non-financial transactions, every month from their own bank ATMs. And, they will be eligible for three free transactions (both financial and non-financial) from other banks’ ATMs in metro cities. In non-metro centers, customers will be able to do five transactions (financial and non-financial) from other bank ATMs. Beyond the prescribed number of free transactions that a customer is eligible to do from other bank ATMs’, currently, they are charged Rs 20 per transaction. But, RBI has now hiked this interchange fee from Rs 20 to Rs 21 per transaction, effective January 1, 2022.