ATM Transaction Costs To Rise From May 1: Check New Charges On Cash Withdrawal
The revised charges were announced by the RBI following a push from white-label ATM operators, who argued that piling operational costs were hurting the business.
Automated Teller Machine withdrawals in India are set to become more expensive from May 1, as the Reserve Bank of India has approved a hike in ATM interchange fees. This means financial transactions conducted through ATMs will attract additional charges starting May.
An ATM interchange fee is a charge that one bank pays another for providing ATM services. This fee, usually a fixed amount per transaction, is often passed on to customers as part of their overall transaction costs.
The revised charges were announced by the RBI following demands from white-label ATM operators, who argued that rising operational costs were impacting their business. These changes are now set to further burden consumers who prefer cash withdrawals over digital transactions.
The increase in ATM charges will apply across India. The additional fee will kick in once the customer exhausts their free limit.
The revised charges are likely to impact customers of smaller banks more significantly, as these banks depend on larger counterparts for ATM infrastructure and related services.
What Are The Revised ATM Fee Charges?
From May 1, customers will have to pay an additional Rs 2 for financial transactions. For non-financial transactions, the new fee has been increased by Rs 1.
Cash withdrawal at ATMs will incur a charge of Rs 19, up from earlier Rs 17. Similarly, the balance enquiry facility will cost Rs 7 per transaction. To be clear, the charges kick in only after exhausting the free limit as stated above.
Cash withdrawal fee: Rs 19 per transaction.
Balance inquiry fee: Rs 7 per transaction.
Once considered revolutionary, ATMs have been struggling in India since the rise of digital payments.
The convenience of digital payments through online wallets is very popular, as seen in the data on growth in transactions. In FY14, digital payments amounted to Rs 952 lakh crore. In FY23, they stood at Rs 3,658 lakh crore, according to the government data.
