The RBI in view of the recommendation of the Committee that has been entrusted with the job of evaluating ATM charges and fee structure with particular focus on interchange fee for ATM transactions has made an observation that the last time the change in interchange fee was implemented was in August 2012, and similarly in respect of customer charges the revision was made in August 2014.
"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, it has been decided ..", said the RBI notification.
Here are mentioned all the cash withdrawal rule changes at ATM that you should know as a bank customer:
1. Number of free transactions capped from own bank ATMs:
Now a bank customer shall be allowed a maximum 5 free transactions, whether they are financial or non-financial in nature, from their own bank ATMs.
2. Transactions at other bank ATMs will also be free up to a specified limit:
ATM card holders can also access their debit or credit card for transactions at an ATM facility of a different bank or other bank for free up to a defined limit. This limit is suggested at 3 transactions in metro cities and 5 in non-metro cities.
3. Interchange fee hiked:
The RBI has allowed hike with respect to interchange fee from Rs. 15 to Rs. 17 in case of financial transactions, while for non-financial transaction, the amount has been hiked by Rs. 1 from Rs. 5 earlier to Rs. 6. The new hiked fee shall come into effect from August 1, 2021.
Interchange fee is the fees paid by the card issuing bank to the ATM operator every time a transaction is carried at an ATM that does not belong to its network.
4. Increase in charges levied on cash withdrawal at ATMs beyond free limit:
"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," said the RBI circular. Currently these charges are at Rs. 20 per transaction.