The Reserve Bank of India has increased the automated teller machines fee by Rs 2 to Rs 23 per transaction with effect from May 1.
The ATM interchange fee will be as decided by the ATM network, the central bank said in a press release on Friday. The interchange fee has been increased to Rs 19 from Rs 17 for financial transactions and Rs 7 for non-financial transactions. Goods and services tax will be applied additionally on these transactions.
Customers are eligible for five free transactions, which will include financial and non-financial transactions every month from their own bank ATMs.
For ATM transactions from other banks, customers will also be eligible for free transactions for only three transactions in metro centres and five transactions in non-metro centres. However, a fee will be levied after customers exhaust their free transactions limit, the RBI said.
The move comes as ATM operators and banks have requested to hike the fees as they have been facing rising operational costs, including increased prices of cash-handling and transportation, maintenance of machines, higher rents and electricity bills and increased security requirements.
After AGS Transact Technologies, a key service provider ATM, reported financial instability by defaulting on its debt obligations, banks have been facing growing challenges.
AGS Transact, which manages a significant portion of ATMs across India, is in the middle of a financial crisis, as it struggles to settle defaults totalling Rs 726 crore, outstanding GST dues, employee salaries, and payments to property owners of ATM locations.
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