Withdraw cash from ATM more than 5 times, now more money will have to be paid, interchange fee also increased

Now withdrawing cash from ATM more than five times will attract more fees

Now you will have to pay a higher fee for withdrawing cash from banks’ ATMs more than five times or taking other services. Earlier this fee was Rs 20 but now it has been increased to Rs 21. The increased fees will be applicable from January 1, 2022. Free transactions are allowed thrice at other banks’ ATMs in metropolitan cities and five times in smaller cities. But the interchange fee has been increased from Rs 15 to Rs 17 (per transaction) for cash withdrawal and from Rs 5 to Rs 6 for other non-financial transactions. Interchange fee is levied on withdrawal of cash or other transactions from other bank’s ATMs after a limit. The interchange fee will be applicable from 1st August 2021.

There was pressure to increase the cost of ATM installation and maintenance charges

RBI has said that the charges have been increased due to increase in the cost of installation and maintenance of ATMs. ATM operators were also demanding a hike in interchange fees for a long time but the bank was not ready for it. Because the banks felt that eventually this burden would fall on the customers. RBI had constituted a committee in June 2019 to review ATM charges and fees. RBI has said that after considering the recommendations of this committee, it was decided to increase the ATM transaction fee. The last time the ATM interchange fee structure was changed was in August 2012.

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ATM usage is decreasing due to increase in online transactions

In fact, due to the increase in online transactions, there has been a decrease in ATM transactions. Accordingly, the cost of installing ATMs is also costing the banks. This is the reason that for some time there was a demand to increase the fees of ATM transaction. ATM operators had put pressure on the banks. Eventually the RBI decided to increase the fixed fee for withdrawing cash or availing other services beyond a certain limit.