The central bank of India, Reserve Bank of India (RBI) has permittedbanks to increase charges. The last time the charges were updated was in August2012 and RBI claimed in its notification that “a substantial time has thuselapsed since these fees were last changed.”
The rationale is to cover the increasing cost of ATM deploymentand maintenance. The changes were based on the recommendations of a committeeset up in June 2019 by RBI under the chairmanship of the chief executive theIndian Banks’ Association. The committee was charged with reviewing the completespectrum of ATM charges especially on interchange structure for ATMtransactions.
The changes are:
Charges after free monthly limit on transactions
The charge has been increased to Rs 21 from Rs 20 pertransaction if they exceed their monthly limit of free transactions.
This change of 5% in the charge will be effective fromJanuary 1, 2022.
New free ATM transaction limit
First of all, the banks will be considering financial andnon-financial transactions toward counting the number of free transactions. Further,in metro locations the number of free transactions will be three and innon-metro five.
Interchange fee increase
The interchange fee will be increased from Rs 15 to Rs 17,an increase of 13%, for financial transactions. For non-financial transactions,the charges have been hiked from Rs 5 to Rs 6, an increase of 20%.
The changes are applicable in both metro and non-metrolocatons.