The cardholders are in for a major shift in the upcoming new year as the Reserve Bank of India (RBI) allowed banks to increase charges on cash and non-cash ATM withdrawals above the free monthly limitations. The hiked charges will be applicable once the free monthly limit is exhausted from January 1, 2022.
What’s the change?
As per RBI’s statement, the withdrawal charges have been hiked by Rs 1 from the previous charges. The hiked charges will be applicable once the free monthly limit gets exhausted. Consumers have been receiving messages of hiked charges from their respective banks.
Beginning from January 1, 2022, if consumers surpass the monthly limit of free transactions, they will have to bear a fee of Rs 21 per transaction, instead of the previous fee of Rs 20.
Bank customers with debit cards will have five free transactions per month, cash or non-cash, at their own banks’ ATMs. Further, customers can also avail three free transactions from other banks in metro cities and five free transactions in non-metro cities.
RBI on customer charges
“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. This increase shall be effective from January 1, 2022,” the RBI had said in a circular.
RBI said the latest rule will also be applicable on Cash Recycler Machines.
The Regulatory Bank had constituted a Committee in June 2019 under the Chairmanship of the Chief Executive, Indian Banks’ Association to review the entire gamut of ATM charges and fees with a particular focus on interchange structure for ATM transactions. The last change in interchange fee structure for ATM transactions was in August
2012, while the charges payable by customers were last revised in August 2014.
“Accordingly, given the increasing cost of ATM deployment and expenses towards ATM maintenance incurred by banks / white label ATM operators, as also considering the need to balance expectations of stakeholder entities and customer convenience,” the RBI notified.
The RBI also clarified that applicable taxes, if any, shall be additionally payable. These instructions shall also apply, mutatis mutandis, to transactions done at Cash Recycler Machines (other than for cash deposit transactions).
