Bank customers to pay Rs 21 per ATM transaction after free limit from 2022: RBI

The Reserve Bank on Thursday permitted banks to increase charges for cash and noncash ATM transactions beyond free monthly permissible limit from next yearBank 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 transactionsTo 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 circularHowever customers will continue to be eligible for five free transactions inclusive of financial and nonfinancial transactions every month from their own bank ATMs They would also be able to do three free transactions from other bank ATMs in metro centres and five in nonmetro centresAlso Read RBI imposes Rs 10 crore penalty on HDFC Bank over deficiencies in regulatory complianceAlso effective 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 nonfinancial transactions in all centres the circular saidATMs are deployed by banks for serving their own customers and also provide services to other banks customers as acquirers where they earn interchange incomeThe RBI said the charges have been allowed to be increased given the increasing cost of ATM deployment and expenses towards ATM maintenance incurred by bankswhite label ATM operators as also considering the need to balance expectations of stakeholder entities and customer convenienceIt is to be noted here that the central bank had set up a committee in June 2019 under the chairmanship of the chief executive of Indian Banks Association to review the entire gamut of Automated Teller Machine ATM charges and fees with particular focus on interchange structure for ATM transactionsThe RBI said the suggestions of the panel were comprehensively examinedIt 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 it saidThere were 115605 onsite ATMs and 97970 offsite ones as on March 31 2021 About 90 crore debit cards issued by different banks were outstanding at endMarch 2021The first ATM in India was set up in 1987 by HSBC in Mumbai In the following twelve years about 1500 ATMs were set up in India In 1997 the Indian Banks Association IBA set up Swadhan the first network of shared ATMs which allowed interoperable transactionsThis story has been sourced from a third party syndicated feed agencies Midday accepts no responsibility or liability for its dependability trustworthiness reliability and data of the text Midday managementmiddaycom reserves the sole right to alter delete or remove without notice the content in its absolute discretion for any reason whatsoever