The Reserve Bank of India (RBI), vide its order dated 10th June 2021, has hiked interchange fee and customer charges ATM usage. The 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.
Interchange fee
Accordingly, the interchange fee has been hiked from ₹15 to ₹17 per financial transaction and from ₹5 to ₹6 per non-financial transaction in all centres. The new interchange fee will be effective from August 1, 2021. The ATM card issuing bank pays an interchange fee to the operator of the ATM when a customer makes a transaction at an ATM that does not belong to the card issuing bank.
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).
Input: The Hindu