Reserve Bank of India announced to increase ATM withdrawal fee. From May 1, bank customers will have to pay 2 rupees more for every additional transaction after exceeding the monthly free transaction limit.
Currently, banks charge 21 rupees on every withdrawal after exceeding the free transaction limit, which has now been increased to 23 rupees. RBI has also increased the ATM interchange fee by 2 rupees. Now 19 rupees will be charged on every interchange transaction. Currently the interchange fee is 17 rupees.
According to the rules of banks, customers can make 5 free transactions every month in metro cities and 3 free transactions in non-metro cities. After this, a fixed charge will have to be paid on every additional transaction. RBI has decided to increase the charges on the request of white-label ATM operators. The operators had demanded to increase the charges citing rising operational costs.
You will have to pay more to check the balance
. The charges for non-financial transactions like checking the balance have also been increased. Earlier, you had to pay Rs 6 for checking the balance, which has now increased to Rs 7. ATM interchange fee is the fee that a bank pays to another bank in exchange for providing ATM service. This is usually a fixed fee charged on every transaction, which banks charge from customers.
The increase in ATM charges may have a greater impact on the customers of smaller banks
as these banks are dependent on larger financial institutions for ATM network and related services.
ATM usage is decreasing
Due to the increasing trend of digital payments, the need for cash withdrawal from ATMs has reduced. According to government data, the total value of digital payments in India was Rs 952 lakh crore in FY 2014, which increased to Rs 3,658 lakh crore by FY23. This shows that people are now giving more preference to cashless transactions.
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