RBI Sets New Limit On Free ATM Withdrawals, Hikes Charges

New Delhi: The Reserve Bank of India (RBI) has changed the ATM rules with regard to cash withdrawal.

Some of the revised rules include a new limit on free ATM transactions, increased charges for transactions beyond the free permissible limit per month and an increase in the interchange fee per transaction among others.

Here are 5 big changes related to ATM withdrawals:

1. RBI has now permitted banks to increase charges for cash and non-cash ATM transactions beyond the free permissible limit per month 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 in a circular.
2. 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.
3. Customers are eligible for five free transactions (inclusive of financial and non-financial transactions) every month from their own bank ATMs.
4. Customers are also eligible for free transactions (inclusive of financial and non-financial transactions) from other bank ATMs viz. three transactions in metro centres and five transactions in non-metro centres. Beyond the free transactions, the ceiling/cap on customer charges is Rs 20 per transaction.
5. In another announcement, RBI has said that effective from August 1, 2021, banks are 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 centres, the circular said.

The changes were announced on the basis of the suggestions of a committee set up by RBI to review the entire gamut of ATM charges and fees in June 2019.

“The recommendations of the panel were comprehensively examined. It is also observed that the last change in interchange fee structure for ATM transactions was in August 2012, while the charges payable by customers were last revised in August 2014. A substantial time has thus elapsed since these fees were last changed,” the RBI said in a circular.