By Express News Service
NEW DELHI: Withdrawing cash from ATMs will be costlier from January 1, 2022, as the Reserve Bank of India (RBI) has allowed banks to charge customers up to Rs 21 per transaction (plus 18% GST, which makes it Rs 24.78). Currently, the cap is Rs 20 per transaction plus GST.
The increase, according to RBI, is “to compensate the banks for the higher interchange fee and given the general escalation in costs”. While the banking regulator has set the upper limit, banks charge different rates within the limit. For example, SBI allows five free transactions in a month.
Thereafter, it charges Rs 10 plus GST for withdrawing money from its own machines. For non-SBI ATMs, this will be Rs 20 plus GST. ICICI Bank levies a flat Rs 20 plus GST from the fifth transaction onwards. RBI has also increased the interchange charge from Rs 15 to Rs 17 for each financial transaction and from Rs 5 to Rs 6 for non-financial transaction.
Interchange charges are the fees a bank pays to another lender when the former’s customer uses the latter’s ATM to withdraw cash. According to RBI, the first five transactions in a month will be free if customers use their own banks’ ATMs. They are also eligible for free transactions (including financial and non-financial) from other bank ATMs – three transactions in metro centres and five transactions in non-metros.
These changes are based on the report from a committee formed by the central bank in 2019 to review ATM charges. The committee had submitted its report in July 2020. The last time the interchange fee for ATM transactions was changed was in August 2012, while the charges payable by customers were last revised in August 2014.
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