Banks install ATMs for the convenience of their customers. Along with this, services are also provided to the customers of other banks. For usage beyond the prescribed limit, they charge a fee which is called interchange fee.
For withdrawing money from banks’ ATMs more than the fixed free limit, more charges will have to be paid from next year. The Reserve Bank of India (RBI) on Thursday allowed banks to increase charges for cash withdrawals or other transactions beyond the prescribed free monthly limit through ATMs from next year.
Under this, if bank customers transact more than the permissible limit of free withdrawal or other facilities from January 1, 2021, then they will have to pay Rs 21 per transaction, which is Rs 20 at present. In a circular, the RBI said, “Banks are required to increase the customer charges per transaction to Rs 21 to compensate for the interchange fee charged for use of the card at ATMs of other banks and in view of the increase in other costs. Permission has been given. The increased duty will come into effect from January 1, 2022.”
However, customers will be eligible for five free transactions (financial and non-financial transactions) every month from their bank’s ATMs as before. They will be able to transact thrice at other banks’ ATMs in metropolitan cities and five times in smaller cities. According to the circular, with effect from August 1, 2021, the ‘interchange fee’ per financial transaction has been allowed to be increased from Rs.15 to Rs.17 and in case of non-financial transactions from Rs.5 to Rs.6.
Banks install ATMs for the convenience of their customers. Along with this, services are also provided to the customers of other banks. For usage beyond the prescribed limit, they charge a fee which is called interchange fee.
RBI said that in view of the increasing cost of installation of ATMs and increase in the maintenance cost of ATM operators, the fee hike has been allowed. It takes care of the need to balance between the facilities of the concerned units and the customers.
We have taken all measures to ensure that the information provided in this article and on our social media platform is credible, verified and sourced from other Big media Houses. For any feedback or complaint, reach out to us at informalnewz@gmail.com
