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Pay more at other bank ATMs as the RBI raises the interchange fee

With effect from August 1, 2021, the Reserve Bank of India (RBI) has increased the interchange fee per transaction at ATMs (automated teller machines) from Rs 15 to Rs 17 for financial transactions and from Rs 5 to Rs 6 for non-financial transactions.

In a statement, the RBI stated, “The recommendations of the Committee have been comprehensively examined. It is also observed that 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. A substantial time has thus elapsed since these fees were last changed.”

The customer charge ceiling/cap, which was previously Rs 20 per transaction, has now been raised to Rs 21 per transaction. This hike will take effect on January 1, 2022, to account for the more significant interchange outlay for banks.

RBI also mentioned,” These instructions shall also apply to transactions done at cash recycler machines, other than for cash deposit transactions.”

Customers are still eligible for five free transactions per month from their bank’s ATMs, including both financial and non-financial transactions. They are also eligible for free transactions from other bank ATMs, including financial and non-financial transactions, up to three in metro areas and five in non-metro regions.

Using other banks’ ATMs in addition to these free transactions will now be more expensive. Private banks and white label ATM operators have been requesting an increase in the interchange fee to Rs 18 for years.

The RBI’s revisions are based on the recommendations of a committee established in June 2019 under the chairmanship of the Indian Banks’ Association’s Chief Executive to review the full spectrum of ATM charges, with a particular focus on the interchange structure for ATM transactions.

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