New Delhi: This news is important for individuals who withdraw cash from ATMs or make cash payments instead of using digital payment. A report claimed that withdrawing cash from an ATM could become expensive as the Reserve Bank of India is reportedly going to increase the fees for withdrawing cash from the cash vending machines.
At present, the Reserve Bank rules state that 5 cash from ATM are free in a month, but now RBI is planning to increase the charges and ATM interchange fees for exceeding the limit of these 5 transactions, as per the report of Hindu Business Line.
Citing people with knowledge of the matter, the report mentioned that NPCI has recommended increasing the charge for withdrawing cash from the existing charge of Rs 21 to Rs 22 after the free limit is reached five times. Besides this, NPCI has also recommended increasing the ATM interchange fee for cash transactions from Rs 17 to Rs 19.
ATM Withdrawal Limit and Transaction Charges
The RBI guidelines state that the transactions at a bank’s own ATM (On-Us transactions), the banks are required to offer their savings bank account holders a minimum of five free financial transactions in a month, irrespective of the location of ATMs. Any number of non-cash withdrawal transactions will be provided free.
The transactions at any other banks’ ATM (Off-Us transactions) in six metro locations, viz. Bengaluru, Chennai, Hyderabad, Kolkata, Mumbai, and New Delhi, banks are mandated tp offer their savings bank account holders a minimum of three free transactions (including financial and non-financial transactions) in a month. However, if the transactions are at any other banks’ ATM (Off-Us transactions) at non-Metro locations, other than the above-mentioned six metro locations, banks must offer its savings bank account holders a minimum of five free transactions (including financial and non-financial transactions) at other bank ATMs in a month.
What is Interchange Fee
Interchange fee is levied on withdrawing money beyond a limit from another bank’s ATM. That is, it is a fee paid by one bank to another bank for using ATM service. According to the report, banks and white-label ATM operators agree with NPCI’s recommendation to increase fees in metro and non-metro cities. However, RBI and NPCI are yet to release any official communication regarding this.
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According to the report, the cost of operating ATMs in non-metro cities is increasing rapidly due to rising inflation and borrowing costs increasing at the rate of 1.5-2 percent in the last two years, higher expenditure on transportation, cash replenishment and costs.
The Reserve Bank of India (RBI) is reportedly considering increasing ATM withdrawal fees. Currently, five free transactions are allowed per month, but this may change. The National Payments Corporation of India (NPCI) has reportedly recommended raising the charges for exceeding this limit from Rs 21 to Rs 22 and the ATM interchange fee from Rs 17 to Rs 19. Personal Finance Business News – Personal Finance News, Share Market News, BSE/NSE News, Stock Exchange News Today
