The Reserve Bank of India (RBI) has approved a hike in the interchange fees per transaction through automated teller machines (ATMs) from the existing Rs 15 to Rs 17 for financial transactions. For non-financial transactions, the fees have been increased from Rs 5 to Rs 6. The increased fees will be applicable from August 1, 2021 onwards. 

The customers will also be allowed five free transactions, including financial and non-financial ones, on a monthly basis from their own bank ATMs. They will also be able to conduct three free transactions from ATMs of other banks in metro cities. On crossing the prescribed number of free transactions, which a customer is eligible to conduct from other banks’ ATMs, the interchange fee has been hiked from the existing Rs 20 to Rs 21 per transaction. This hike however will be applicable from January 1, 2022.

An interchange fee is the amount which a card-issuing bank pays to an ATM operator if a transaction by a customer has been made from an ATM which does not belong to the card-issuing bank. The increase in the interchange fee structure is being effected after 2012, while the charges payable by customers were last revised in August 2014. The central bank has cleared the new charges on the basis of the recommendations of a committee which it had formed two years ago to study the ATM charges and interchange fees. 

The RBI has also taken into account the increasing cost of ATM deployment and expenses towards ATM maintenance incurred by banks and white-label ATM operators, a statement issued by the central bank has said.