Banks To Charge More Fees For Financial & Non-Financial Transactions From August

The Reserve Bank of India (RBI) announced a revision to the interchange fee review for ATM transactions on Thursday. As a result, commencing from August 1, 2021, the RBI has increased the interchange charge 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. According to the recent notification of RBI, issued on June 10-2021, 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, it has been decided as under:

• Allow 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, according to the statement of RBI.
• According to the statement of RBI "Customers are eligible for five free transactions (inclusive of financial and non-financial transactions) every month from their own bank ATMs. They are also eligible for free transactions (inclusive of financial and non-financial transactions) from other bank ATMs viz. three transactions in metro centres and five transactions in non-metro centres. Beyond the free transactions, the ceiling / cap on customer charges is Rs 20 per transaction. To compensate the banks for the higher interchange fee and given the general escalation in costs, they are allowed to increase the customer charges to Rs 21 per transaction. This increase shall be effective from January 1, 2022."

Following the revision in the interchange fee structure, some of the leading banks have already started charging more on ATM cash withdrawal charges. For instance, the State Bank of India (SBI) increased the service charges for cash withdrawals at its own ATMs and bank branches. The revised fee per cash withdrawal transaction at a Branch Channel/ATM is Rs 15 + GST.

According to the SBI website, BSBD account holders would be entitled to four free cash withdrawals every month, comprising ATMs and bank branches. SBI ATM cardholders are authorised for three free transactions in six metro centres covering Mumbai, Delhi, Chennai, Kolkata, Hyderabad, and Bengaluru and five free transactions for both financial and non-financial in a calendar month for savings account holders at other locations, according to RBI guidelines.

ICICI Bank would adjust the ceilings on cash transactions, ATM interchange, and cheque book fees for its domestic savings account holders. According to the bank's official website, these service costs would go into effect from August 1, 2021. To know more click here.