ATM transactions beyond the allowed free limit will cost more starting January 1

ATM transactions beyond the allowed free limit will cost more starting January 1

MUMBAI: Reserve Bank on Thursday allowed banks to increase cash and non-cash charges ATM transactions beyond the free monthly allowed limit starting next year.
Bank customers will have to pay Rs 21 per transaction, instead of Rs 20, from January 1, 2022, if they exceed the monthly limit for free transactions.
“To compensate banks for the higher interchange fee and given the general escalation in costs, they are allowed to increase charges to customers to Rs 21 per transaction. This increase will be effective from January 1, 2022.” the RBI said in a circular. .
However, customers will still be eligible for five free transactions (including financial and non-financial transactions) each month from their own banks’ ATMs. They could also make three free transactions from other bank ATMs in metropolitan centers and five in non-metropolitan centers.
Also, as of August 1, 2021, banks can increase the interchange fee per transaction from Rs 15 to Rs 17 for financial transactions and from Rs 5 to Rs 6 for non-financial transactions in all centers, the circular said.
Banks use ATMs to serve their own customers and also provide services to customers of other banks as acquirers where they earn exchange income.
The RBI said fees have been allowed to increase given the increasing cost of ATM implementation and ATM maintenance expenses incurred by banks / white label ATM operators, as well as considering the need to balance the expectations of the interested entities and the convenience of the client.
It should be noted here that the central bank had established a committee in June 2019 under the chairmanship of the Chief Executive Officer of the Indian Banking Association to review the full range of ATM fees and charges, with particular emphasis on the exchange. structure for ATM transactions.
The RBI said the panel’s suggestions were thoroughly examined.
“It is also noted that the last change in the interchange fee structure for ATM transactions was in August 2012, while the charges payable by customers were last revised in August 2014. Therefore, it has elapsed a considerable time since the last modification of these rates, “he said. .
There were 1,15,605 ATMs on-site and 97,970 off-site as of March 31, 2021. Approximately 90 million debit cards issued by different banks were pending at the end of March 2021.
India’s first ATM was created in 1987 by HSBC in Mumbai. In the next twelve years, around 1,500 ATMs were installed in India. In 1997, the Indian Banks Association (IBA) established Swadhan, the first shared ATM network that allowed interoperable transactions.


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