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Pay more at other bank ATMs from Aug as RBI raises interchange fee

Vivek Dubey     June 10, 2021

The Reserve Bank of India (RBI) has raised the interchange fee per transaction at ATMs (automated teller machines) from Rs 15 to Rs 17 for financial transactions and from Rs 5 to Rs 6 for non-financial transactions, effective from August 1, 2021.

The RBI, in a statement, said, "The recommendations of the Committee have been comprehensively examined. It is also observed that the last change in interchange fee structure for ATM transactions was in August 2012, while the charges payable by customers were last revised in August 2014. A substantial time has thus elapsed since these fees were last changed."

The ceiling/cap on customer charges, which was earlier Rs 20 per transaction, has now been increased to Rs 21 per transaction. This increase takes into account the higher outgo on the interchange for banks and will be effective from January 1, 2022.

"These instructions shall also apply to transactions done at cash recycler machines, other than for cash deposit transactions," added RBI.

However, the customers are still eligible for five free transactions -- inclusive of financial and non-financial transactions -- every month from their bank's ATMs.

They are also eligible for free transactions -- inclusive of financial and non-financial transactions -- from other bank ATMs i.e. three transactions in metro centres and five transactions in non-metro centres.

Using other banks' ATMs beyond these free transactions will be costlier now. For years, private banks and white label ATM operators had been seeking a hike in the interchange fee to Rs 18.

The changes announced by the RBI are based on the recommendations of a committee set up in June 2019 under the Chairmanship of the Chief Executive, Indian Banks' Association, to review the entire gamut of ATM charges, with a particular focus on the interchange structure for ATM transactions.

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