Rules for ATM transactions to change from Jan 1: Here’s what you need to know

From January 1, 2022, ATM users will have to pay higher fees in case they happen to exceed the free monthly permissible limit of transactions. This is because the Reserve Bank of India (RBI) has allowed banks to raise fees for cash and non-cash transactions at ATMs beyond the permissible limit from next year onwards.

The central bank permitted the banks to increase charges for cash and non-cash transactions beyond the permissible limit in order to offset the higher interchange fee and the general escalation in costs. “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 Rs 21 per transaction. This increase shall be effective from January 1, 2022,” the RBI said in a circular.

“They are also eligible for five free transactions (inclusive of financial and non-financial transactions) every month from their own bank ATMs,” the central bank circular further mentioned.

Here’s what customers need to know about this new rule from January 1

1. The Reserve Bank of India (RBI) has allowed the banks to increase the fee for cash and non-cash ATM transactions in order to offset higher interchange fee and general escalation in costs.
2. Bank customers have to pay Rs 21 per transaction instead of Rs 20 if they exceed the permissible monthly limit of free transactions.
3. Customers will get five free transactions per month, including financial and non-financial transactions, every month from their respective banks. 
4. Users will be allowed three free transactions from other bank ATMs in metro centres and five free transactions in non-metro centres.
5. Some banks like HDFC Bank and Axis Bank have already notified customers about the fee hike on exceeding monthly free ATM transactions.

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