The Reserve Bank of India (RBI) has allowed banks to increase transaction fees for ATMs based on recommendations from a committee. The central bank has allowed banks to increase fees for interbank transactions and fees for non-financial transactions. Here is everything you need to know.
Starting August 1st, customers will have to pay more for ATM transactions. (Photo: Representative Image)
The Reserve Bank of India (RBI) has allowed banks to reduce the transaction fees for ATMs on the Committee recommendations.
The central bank published a circular on Thursday, allowing banks to increase interbank fees per transaction through ATMs and non-financial transactions. Starting August 1, 2021, banks will be able to increase the fees for ATM transactions.
The RBI noted that the last change to the interbank fee structure for ATM transactions was made in August 2012, while the fees payable by customers were last revised in August 2014.
HIGHER CHARGES FOR ATM TRANSACTIONS
The RBI agrees that it has been a considerable time since the last change in ATM transaction fees and has given banks the green signal to allow the interbank fee per transaction to increase from Rs 15 to Rs 17 for financial transactions.
It should be noted that an interbank fee is an amount that a card-issuing bank pays to ATM operators if their customer uses an ATM that does not belong to it.
The central bank has also approved an increase in non-financial transactions from 5 rupees to 6 rupees in all centers.
While customers are still entitled to five free transactions – including financial and non-financial transactions – each month at their own ATMs, they will have to pay more for transactions that exceed the limit.
Meanwhile, customers have also been allowed three free transactions from other banks’ ATMs in major cities and five transactions in cities outside of major cities.
“In addition to the free transactions, the upper limit for customer fees is 20 per transaction,” said the RBI. This means customers can be billed up to Rs 20 for transactions in the arms of other banks over and above the free limit.
However, in order to compensate the banks for the higher interbank fees, the banks were allowed to increase the customer fees to Rs 21 per transaction, the RBI said. This increase applies from 01/01/2022.
In addition to the aforementioned increase in rates, taxes may also have to be paid by the customer.
Reading | Fact check: As of June 1st, you will not be charged any additional fees for ATM transactions
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