ATM Withdrawal Charges: Nowadays, most people use ATM cards. If you also use an ATM card, this information could prove crucial for you. Did you know that exceeding the transaction limit on your ATM card incurs a charge? If you are unaware of this, please read this article in full.
RBI Approval
Last year, the RBI approved an increase in ATM interchange fees. Consequently, if you withdraw cash or check your balance at an ATM belonging to a bank other than your own, you will incur higher charges. This change was implemented following requests from White Label ATM operators and RBI approval.
Know the Charges
If you use your ATM card frequently, you will have to pay charges. The fee was previously ₹17 but has since been raised to ₹19. The charge for checking your balance is ₹7. These charges apply once you have exhausted your monthly free transaction limit. Customers are entitled to 5 free transactions in metro cities and 3 in non-metro cities.
NPCI Proposal
While the RBI granted the approval, the proposal was put forward by the NPCI (National Payments Corporation of India). ATM operators had argued that it was becoming increasingly difficult to cover rising operational costs with the old fee structure. However, the RBI has not made any further changes at this time.
Impact on Banks
Reports suggest that smaller banks will not be significantly affected. Since they have limited ATM networks, they already rely heavily on other banks’ ATMs. The hike in interchange fees directly affects customers. Interchange fees refer to the amount one bank pays another when a customer uses an ATM belonging to a different bank.
How to Avoid Higher Charges
To avoid these higher ATM charges, use ATMs from your own bank. You can also opt for digital payment methods.
Here is what the rule states:
If you withdraw cash, you are charged between ₹17 and ₹19. Additionally, a fee ranging from ₹6 to ₹7 per transaction is charged for balance inquiries.
Who does this rule apply to?
This RBI rule applies to individuals who exceed their monthly free transaction limit. Customers are entitled to 5 free transactions in metro cities and 3 in non-metro cities.