Big changes in ATM transaction rules: 5 things to know

ATM transactions beyond the free permissible limit to cost more from next year, 1 January 2022. So, what are the big changes in ATM transaction rules. The Reserve Bank of India (RBI) has permitted banks to increase charges for cash and non-cash ATM transactions beyond the free monthly permissible limit from next year.

The central bank had constituted a Committee in June 2019 under the Chairmanship of the Chief Executive, Indian Banks’ Association to review the entire gamut of Automated Teller Machine (ATM) charges with a particular focus on interchange structure for ATM transactions.

“The recommendations of the Committee have been 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.

ATM transaction rules: What RBI has changed

1) 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. “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 ₹21 per transaction. This increase shall be effective from January 1, 2022,” RBI said.

2) 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, effective August 1, 2021, the circular said.

3) Customers will continue to be eligible for five free transactions (inclusive of financial and non-financial transactions) every month from their bank ATMs.

4) They would also be able to do three free transactions (inclusive of financial and non-financial transactions) from other bank ATMs in metro centres and five in non-metro centres.

5) These instructions shall also apply to transactions done at Cash Recycler Machines (other than for cash deposit transactions).