How new ATM cash withdrawal rule will affect you? Details here
Automated Teller Machines (ATMs) across banks are all set to undergo a change from today, August 1, following an order from the Reserve Bank of India (RBI). From today, the interchange fee that banks charge after each transaction on the ATM machine will go up from today.
What is an interchange fee?
The interchange fee is charged by banks to merchants processing payments through credit cards or debit cards.
Starting August 1, the interchange fee that banks can charge on Automated Teller Machines (ATM) will see an increase of ₹2 following the Reserve Bank of India (RBI) order. In June, the central bank raised the interchange fee from ₹15 to ₹17, while for non-financial transactions the fee has been raised from ₹5 to ₹6.
Why were charges for ATM cash withdrawals hiked?
The central bank had said these charges were allowed to be hiked owing to the increasing cost of ATM deployment and expenses towards the maintenance of ATM that banks incur.
The changes were announced on the basis of the suggestions of a committee set up by the RBI in June 2019. It was set up under the chairmanship of the chief executive of the Indian Banks’ Association to review the entire gamut of ATM charges and fees with a particular focus on interchange structure for ATM transactions.
Free ATM cash transactions every month
As per the revised rules, the customers will be eligible for five free transactions every month from their home bank ATMs. Customers can claim free transactions from ATMs of other banks, too, which include three withdrawals in metros and five in non-metro cities.
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