RBI hikes ATM interchange fee per transaction from Rs 15 to Rs 17

0 5

The Reserve Bank of India (RBI) on Thursday allowed an increase in the interchange fee structure for ATM transactions after almost 9 years, considering the increasing cost of Automated Teller Machines (ATM) deployment and expenses towards ATM maintenance incurred by the banks and white label ATM operators.

Accordingly, the RBI has hiked the interchange fee per transaction from Rs 15 to Rs 17 for financial transactions and from Rs 5 to Rs 6 for non-financial transactions in all centres, effective August 1, 2021.

The card issuing bank pays an interchange fee to the operator of the ATM when a customer makes a transaction at an ATM that does not belong to the card-issuing bank. Currently, the card-issuing bank pays an interchange fee of Rs 15 for each cash transaction and Rs 5 for each non-cash transaction.

The ATM operators had been pushing for a hike in interchange for some time now but banks were not on the same page on the issue as, ultimately, the extra cost would have to be borne by the customers.

The RBI had, back in June 2019, constituted a committee to review the entire gamut of ATM charges and fees with a particular focus on interchange structure for ATM transactions.

“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 RBI said revising the interchange fees for ATM transactions.

RBI also said that customers will be eligible for five free transactions, which includes financial and non-financial transactions, every month from their own bank ATMs. And, they will be eligible for three free transactions (both financial and non-financial) from other banks’ ATMs in metro cities. In non-metro centres, customers will be able to do five transactions (financial and non-financial) from other bank ATMs.

Beyond the prescribed number of free transactions that a customer is eligible to do from other bank ATMs’, currently, they are charged Rs 20 per transaction. But, RBI has now hiked this interchange fee from Rs 20 to Rs 21 per transaction, effective January 1, 2022.

Dear Reader,

Business Standard has always strived hard to provide up-to-date information and commentary on developments that are of interest to you and have wider political and economic implications for the country and the world. Your encouragement and constant feedback on how to improve our offering have only made our resolve and commitment to these ideals stronger. Even during these difficult times arising out of Covid-19, we continue to remain committed to keeping you informed and updated with credible news, authoritative views and incisive commentary on topical issues of relevance.
We, however, have a request.

As we battle the economic impact of the pandemic, we need your support even more, so that we can continue to offer you more quality content. Our subscription model has seen an encouraging response from many of you, who have subscribed to our online content. More subscription to our online content can only help us achieve the goals of offering you even better and more relevant content. We believe in free, fair and credible journalism. Your support through more subscriptions can help us practise the journalism to which we are committed.

Support quality journalism and subscribe to Business Standard.

Digital Editor



source

You might also like
Leave A Reply

This website uses cookies to improve your experience. We'll assume you're ok with this, but you can opt-out if you wish. Accept Read More