As per the new order from the RBI, the interchange charge that banks can charge on automated Teller Machines (ATM) will see a growth of Rs. 2 from August 1, 2021. Note that, the RBI had elevated the interchange rate in June from Rs 15 to Rs 17, while for non-monetary transactions the price was raised from Rs 5 to Rs 6. This fee is being charged through the banks to customers processing the bills via credit card or debit cards. As according to the new guidelines from the RBI, the clients could be eligible for five free transactions every month from their home bank ATMs. Moreover, the RBI has stated that the clients can claim free transactions from ATMs of different banks, too, which encompass three withdrawals in metros and 5 in non-metro cities.
Further, there are 5 more important rules that are going to change this August 2021.
1- The commercial banks will be allowed to increase interchange fee per transaction from Rs 15 to Rs 17 for financial transactions and from Rs 5 to Rs 6 for non-financial transactions in all cities.
2- The RBI has also allowed the banks to increase the charges for cash and non-cash ATM transactions beyond the free monthly permissible limit from next year. “To compensate the banks for the higher interchange fee and given the general escalation in costs, they are allowed to increase the customer charges to Rs 21 per transaction. This increase shall be effective from January 1, 2022,” the RBI said.
3- The RBI has also stated that the bank customers will have to pay Rs 21 per transaction, instead of Rs 20, with effect from January 1, 2022, if they exceed the monthly limit of free transactions.
4- However, the bank customers are eligible for five free transactions (inclusive of financial and non-financial transactions) every month from their own bank ATMs.
5- Apart from this, the bank customers are also eligible for free transactions (inclusive of financial and non-financial transactions) from other bank ATMs, that is three transactions in metro cities and five transactions in non-metro cities . Beyond the free transactions, the ceiling/cap on customer charges is Rs 20 per transaction.
It has to be noted that the changes have been introduced on the basis of committee suggestions setup by RBI in June 2019. The committee was set up below the chairmanship of the leader executive of the Indian Banks’ association to check the complete range of ATM costs and costs with a selected focus on interchange shape for ATM transactions.