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Withdrawing cash from ATM has become expensive, after free limit, now you will have to pay more

Now people will have to loosen their pockets more for ATM transactions after the fixed limit. Keep in mind that earlier to withdraw cash from ATM, Rs 20 per transaction had to be paid. Now this amount has increased to Rs 21 per transaction. However, this charge will have to be paid only to those customers who withdraw cash more than the prescribed limit every month. The Reserve Bank of India has allowed all banks to increase ATM withdrawal charges. Now from January 1, 2022, after withdrawing money from ATMs more than the prescribed limit, customers will have to pay Rs 21 instead of Rs 20 for every transaction. However, the RBI said that the facility of five free transactions (including financial and non-financial transactions) will continue for customers every month from their bank ATMs. They will also be able to do three free transactions from other bank ATMs in metro cities and five in non-metro cities. Apart from this, banks have been allowed to increase the interchange fee for ATM transactions from Rs 15 to Rs 17 for every financial transaction and from Rs 5 to Rs 6 for non-financial transactions. RBI said that banks were allowed to increase the charges keeping in view the need to balance the rising cost of ATM installation and ATM maintenance expenses incurred by the banks/white label ATM operators as well as the convenience of the stakeholder entities and the customer.

In June 2019, the RBI had constituted a committee under the chairmanship of VG Kannan, the then president of the Indian Banks Association, to review ATM charges. The recommendations of the committee were made public in July 2020. The committee had recommended using population as a metric for computing ATM charges.

RBI said the last change in the interchange fee structure for ATM transactions was done in August 2012, while the charges payable by customers were last revised in August 2014. Thus, it has been a long time since these charges were changed.