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RBI allows hike in ATM charges. Here is all you need to know

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The Reserve Bank of India (RBI) has allowed banks to increase charges on ATM transactions to Rs 21 per transaction, after they have exhausted the free transaction limit, with effect from January 1, 2022.

RBI allows hike in ATM charges. Here is all you need to know
The Reserve Bank of India (RBI) has allowed banks to increase charges on ATM transactions to Rs 21 per transaction after people have exhausted the free transaction limit. The new charges come into effect from January 1, 2022.
The interchange fee, the fee that the merchant bank pays to the card-issuing bank each time a customer swipes their credit or debit card, has also been hiked.
Customers will have to pay Rs 17 instead of Rs 15 as an interchange fee per transaction through ATMs for financial transactions. The charges for non-financial transactions have been hiked from Rs 5 to Rs 6. The revised interchange fee will be effective from August 1, 2021.
The customers will be allowed five free transactions, including financial and non-financial ones on a monthly basis from their own bank ATMs and they will be able to conduct three free transactions from ATMs of other banks in metro cities.
As per the new RBI directives, banks would be able to levy charges on customers within this ceiling, once they exhaust the free transaction limit. “To compensate the banks for the higher interchange fee and given the general escalation in costs, they are allowed to increase the customer charges to Rs 21 per transaction,” RBI said in a statement.
RBI had constituted a committee in June 2019 under the leadership of VG Kannan, Chief Executive, Indian Banks’ Association to review the ATM charges and other fees related to interchange structure for ATM transactions. These revisions in charges have been done after a comprehensive revision of the recommendations of the committee.
The apex banking institution in its statement also said that the structure of interchange fees was last revised in August 2012, while customer charges last saw a change in August 2014.
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