ATM Cash Withdrawal: The Reserve Bank of India (RBI) is preparing to increase the charges levied on exceeding the limit of five free transactions and ATM interchange fees. This information was given in a report of a news portal.
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ATM Cash Withdrawal: Withdrawing cash from ATM will now become expensive as the Reserve Bank of India (RBI) is preparing to increase the charges levied on exceeding the limit of five free transactions and ATM interchange fees. This information was given in a report by Hindu Businessline on Tuesday. This means that now customers will have to spend more from their pocket to withdraw cash from ATM.
How much will the charge increase?
How much is the proposed fee hike? On this, the news portal quoted people aware of the matter in its report and said, National Payments Corporation of India (NPCI) has recommended increasing the maximum cash transaction fee from the current level of Rs 21 to Rs 22 after completion of the free limit five times.
Payment regulator NPCI has also recommended increasing the ATM interchange fee for cash transactions from Rs 17 to Rs 19 after discussing it with the industry.
Let us tell you that the interchange fee is levied on withdrawals from another bank’s ATM after a limit. That is, it is the amount paid by one bank to another bank in exchange for using the ATM service. It is also mentioned on the bill after the transaction from the ATM.
RBI held a meeting on this
According to the report, banks and white-label ATM operators agree with NPCI’s plan to increase fees in metro and non-metro areas. However, the Reserve Bank of India and NPCI have not yet commented on this development.
“The RBI formed a second committee headed by the CEO of IBA, which included officials from SBI and HDFC banks,” the news portal reported, citing a person familiar with the matter.
“After assessing the cost for private and public sector banks, we recommended it in September last year. We said the NPCI recommendation can be kept (for metro sectors), but the real issue is in rural and semi-urban areas,” he added.
Increasing cost of running ATMs
According to the report, due to rising inflation and rising borrowing costs at the rate of 1.5-2% in the last two years, higher expenses on transportation, cash replenishment and compliance costs, the cost of ATM operations has increased in non-metro locations.
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