Now withdrawing money from other bank’s ATM is going to be costly for the customers.
Customers of any bank can withdraw money (ATM Transactions) from their bank’s ATM 5 times every month without any charges. The Reserve Bank of India (RBI) has increased the ATM Interchange Fees from Rs 15 to Rs 17. Let us understand how this will affect the bank customers?
New Delhi. The Reserve Bank of India (RBI) has increased the ATM Interchange Fee from Rs 15 to Rs 17 on every financial transaction done through ATM of another bank on June 10, 2021. The maximum limit of customer charges levied on customers after the free ATM transaction received every month by the customers of any bank (Bank Customer) has been increased from Rs 20 to Rs 21. The hike in interchange fee will be applicable from January 1, 2022. Explain that bank customers can do 5 free transactions from ATM every month.
What is interchange fee and how is it effective
Now let us understand what is ATM interchange fee and how it is effective. If a customer of bank ‘A’ withdraws money from bank ‘B’ ATM using his card, then bank ‘A’ has to pay a certain fee to the other bank. This is what is called ATM interchange fee. For many years, private banks and white label ATM operators have been demanding an increase in the interchange fee from Rs 15 to Rs 18. In other words, withdrawing money from other bank’s ATMs after the free limit will now cost the customers dearly. This decision has been taken on the basis of the recommendations of the committee constituted under the chairmanship of the Chief Executive of the Association of Indian Banks in June 2019.
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The Reserve Bank has said that the last time the ATM interchange fee was changed was in August 2012. At the same time, the duty applicable to the customers was revised in August 2014. In such a situation, after examining the recommendations of the committee, it has been decided to increase the interchange fee and customer charges. The RBI said that this decision has been taken keeping in mind the convenience of all stakeholders and consumers along with the ATM deployment cost and maintenance cost on banks and ATM operators. Explain that the central bank has increased the interchange fee for both financial and non-financial transactions. The central bank has increased the fee for non-financial transactions from Rs 5 to Rs 6, which will be effective from August 1, 2021. This order will also be applicable to the transactions done through the cash recycler machine.