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Pay more to withdraw cash from ATMs; Key things to know…

A host of new changes have already been implemented as a result of the new year. A recent change in India pertains to the withdrawal of cash from ATMs of private and public sector banks. When a customer’s monthly withdrawal limit is reached, irrespective of the bank, he or she now has to pay higher charges on ATM withdrawals. As announced earlier, the Reserve Bank of India will implement the change from the first day of 2022. Customers received notifications from their banks as the date neared.

The New Rule: A bank customer used to pay Rs 20 per transaction once the monthly free withdrawal limit was exceeded at all ATMs. The Reserve Bank of India has raised rates by Rs 1 per extra transaction each month. Customers will now pay Rs 21 for each transaction. These changes were notified last June.

Free transaction limit: All bank customers are currently entitled to no-cost ATM transactions at their own banks before these rates are applied. Customers with debit cards will therefore be entitled to five no-fee ATM withdrawals at their own banks’ ATMs per month (cash or non-cash). In addition, they will get three free transactions from other banks in metro cities (including Bengaluru, Mumbai, Chennai, Kolkata, Delhi, and Hyderabad) and five free transactions in non-metro cities.

RBI’s notification : Customers are entitled to five free transactions per month (including monetary and non-financial transactions) from their own bank ATMs. They are also eligible for free transactions (including monetary and non-financial transactions) at other banks’ ATMs. The maximum is three transactions in metros and five transactions outside metros. There is a ceiling/cap on customer charges on top of the free transactions of Rs 20.

Why RBI Hiking the Fees? Since August 2014, the Reserve Bank of India has not hiked ATM transaction fees. This necessitated a compensation. In order to offset the higher interchange fee and the general escalation in costs, the banks are permitted to increase the customer charge to Rs 21 per transaction.

Prior to this, the RBI had last raised the transaction limit in August 2021, after a gap of seven years. It was noted that the previous change in interchange fee structure for ATM transactions was in August 2012. The charges payable by customers were recently revised in August 2014. A considerable amount of time has elapsed since these fees were last changed, the bank noted.




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