In order to manage the cost of ATM maintenance and installation of new machines, the RBI had approved the increase in the interchange fee. The increased charges will be applicable from today.
Interchange fee hike
Following the order of the Reserve Bank of India (RBI), banks have increased the interchange fee charged on each transaction at ATM machines from August 1, i.e. today. Interchange fee is a fee charged by banks to merchants processing payments through credit cards or debit cards. If a customer of one bank withdraws money from another bank’s ATM using his card, then the bank from whose ATM the money is withdrawn becomes a merchant bank.
Interchange fee has been increased by 2 as per RBI directive. In June, the central bank increased the interchange fee from Rs 15 to Rs 17. Whereas the fee for non-financial transactions was increased from Rs 5 to Rs 6. These rules are being implemented from today.
Reasons for raising fees
The central bank had said that these charges were allowed to increase due to the rising cost of setting up ATMs and maintenance cost of ATMs incurred by the banks. The changes were announced in June 2019 based on the suggestions of a committee constituted by the RBI. It was set up to review the entire gamut of ATM fees and charges under the chairmanship of the Chief Executive of the Indian Banks’ Association. During this, special attention was given to the interchange structure for ATM transactions.
Know how many transactions will be free
As per the revised rules, customers will be able to do five free transactions every month from their home bank ATMs. At the same time, you can also claim free transactions from ATMs of other banks. After that they will have to pay additional charges. Those living in metros will be allowed to make three evacuations for free. Whereas in non-metro cities, you will be able to take advantage of free withdrawal five times.
Customer charges will also increase
The customer charge limit is currently Rs 20 per transaction, which will be increased to Rs 21 with effect from January 1, 2022. Keeping in view the banks to compensate the higher interchange charges and general increase in cost, RBI has allowed banks to increase the customer charges per transaction. This increase will be effective from January 1, 2022.
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