Money & Banking

ATM usage to cost more

Our Bureau Mumbai | Updated on June 10, 2021

RBI has hiked interchange fee, customer charges

The Reserve Bank of India (RBI) has accepted the long-standing demand of banks and White Label ATM operators (WLAO) for a hike in interchange fee in view of increasing cost of ATM deployment and maintenance.

This could encourage deployment of ATMs, which has hit the slow lane in the last one year amid the Covid-19 pandemic.

The interchange fee (which is recovered by banks owning ATMs from card issuing banks for providing) has been upped from ₹15 to ₹17 per financial transaction and from ₹5 to ₹6 per non-financial transaction in all centres. The new fee will be effective from August 1.

Customer charges

Simultaneously, to compensate Banks for the higher interchange fee and given the general escalation in costs, they have been allowed to increase the customer charges for transactions beyond the stipulated free monthly ATM transactions to ₹21 per transaction from ₹20. This increase will be effective from January 1, 2022.

Customers are eligible for five free transactions (inclusive of financial and non-financial transactions) every month from their own bank ATMs. In other bank ATMs they are allowed three transactions in metro centres and five in non-metro centres.

RBI, in a circular, said applicable taxes, if any, will be additionally payable on the interchange fee and customer charges. The central bank added that its instructions also apply, mutatis mutandis (with the necessary changes having been made), to transactions done at Cash Recycler Machines (other than for cash deposit transactions).

ATM additions declined to 2,815 in FY21 against 8,564 in the previous year. The number of ATMs across the country is 2.13 lakh (2.10 lakh.)

Published on June 10, 2021

Follow us on Telegram, Facebook, Twitter, Instagram, YouTube and Linkedin. You can also download our Android App or IOS App.

  1. Comments will be moderated by The Hindu Business Line editorial team.
  2. Comments that are abusive, personal, incendiary or irrelevant cannot be published.
  3. Please write complete sentences. Do not type comments in all capital letters, or in all lower case letters, or using abbreviated text. (example: u cannot substitute for you, d is not 'the', n is not 'and').
  4. We may remove hyperlinks within comments.
  5. Please use a genuine email ID and provide your name, to avoid rejection.