ATM: If you frequently withdraw cash from ATMs, there is significant news to consider. Starting May 1, the cost of withdrawing cash from ATMs is set to rise. Numerous media reports indicate that the Reserve Bank of India (RBI) has sanctioned an increase in the interchange fees associated with ATM cash withdrawals. Specifically, the central bank has raised the ATM interchange fee by Rs 2 for financial transactions and Rs 1 for non-financial transactions. Consequently, the fee for cash withdrawals exceeding the free limit will rise from Rs 17 to Rs 19 per transaction. Additionally, the fee for balance inquiries will increase from Rs 6 to Rs 7 per transaction.
Customers will bear the burden of these increased ATM interchange fees
The report further suggests that customers will bear the burden of these increased ATM interchange fees. Those who regularly use ATMs from banks other than their own will see a rise in their withdrawal expenses. The ATM interchange fee is a charge that one bank pays to another for providing ATM services to its customers, and it is typically factored into overall banking costs.
When a customer withdraws cash from an ATM belonging to Bank B instead of their own Bank A, they will incur a fee after surpassing a specified limit. This includes a provision for five free transactions in metropolitan areas and three in non-metropolitan areas.
The RBI has implemented this change based on recommendations from the National Payments Corporation of India (NPCI). White-label ATM operators had requested an increase in fees, citing that the previous rates were insufficient to cover their operational costs.
These new charges are expected to have a more pronounced effect on smaller banks, which possess a limited number of their own ATMs and rely heavily on the ATMs of other banks.