Cash withdrawal from ATMs are set to become more expensive from January as the Reserve Bank of India (RBI) have introduced new rules for users exceeding their monthly free transactions. Debit and credit card holders will have to shell out more from their pockets starting from the beginning of the next year.
RBI's new ATM withdrawal rules
The RBI have increased the current rates of transaction from Rs 20 to Rs 21 per transaction. Customers will have to pay this amount once the limit exceeds after the change is implemented.
Where did it all start?
In June 2019, the Central Bank had organised a committee under the chairmanship of the chief executive of Indian Banks' Association to review ATM charges and fees, that can keenly focus on the interchange structure for ATM transactions, media reports said.
What did the RBI say?
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, as per media reports.
Reason behind expensive cash withdrawal from ATMs
RBI said that the charges have been increased to offset the rising cost of ATM deployment and expenses relating to ATM maintenance.
Key takeaways of the new RBI ATM transaction rules
* Customers are eligible for five free transactions, that includes both financial and non-financial transactions, every month from their own bank ATMs.
* They are also eligible for free transactions including financial and non-financial transactions from other bank ATMs
* 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.
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