The Reserve Bank of India (RBI) on Thursday approved an increase in the interchange fee per transaction through Automated Teller Machines (ATMs) for financial transactions from the existing Rs 15 to Rs 17. The fee for non-financial transactions has been increased from Rs 5 to Rs 6. The increased fees will be applicable from 1st August 2021.
Customers will be allowed five free transactions, including financial and non-financial, on a monthly basis from their own bank ATMs.
Also they will be able to do three free transactions from ATMs of other banks in metro cities.
On exceeding the prescribed number of free transactions to be done by a customer from ATMs of other banks, the interchange fee has been increased to Rs 21 per transaction from the existing Rs 20. However, this increase will be applicable from January 1, 2022.
An interchange fee is the amount that a card issuing bank pays to an ATM operator if the transaction is performed by the customer at an ATM that does not belong to the card issuing bank.
The increase in the interchange fee structure has been in effect since 2012, while the charges payable by customers were last revised in August 2014. The central bank had approved the new charges based on the recommendations of a committee, which it had constituted two years ago. Study ATM fees and interchange fees.
The RBI also took into account the rising cost of ATM deployment and ATM maintenance expenses incurred by banks and white label ATM operators, a statement issued by the central bank said.