ATM Cash Withdrawals to Get Costlier from Next Month, Know How Much You Need to Pay

ATM Withdrawal Alert: Beginning next month, bank clients using a credit or debit card may be charged additional fees for cash withdrawals at ATMs across the country if their limit for withdrawing money from their own banks' ATMs is exhausted. In a previous announcement, the Reserve Bank of India stated that after the limit is exceeded, users would be charged even greater fees for ATM transactions beginning in January 2022. Customers are already being notified of this move by the banks. Because the RBI has permitted banks to boost charges on cash and non-cash automated teller machines (ATMs) beyond the free monthly limitations, ATM transactions are poised to become more expensive.

Customers would have to pay Rs 21 per transaction at their own banks' ATMs to withdraw money once the limit has been exceeded once the change is enforced. If an identical circumstance occurs, a bank client now pays Rs 20 for each transaction. Before these charges are levied, the Reserve Bank of India permits all bank clients to make five free ATM transactions at their banks. According to the central bank, the new regulation will take effect on January 1, 2022. Customers using debit cards, on the other hand, will be entitled to five free transactions (cash or non-cash) each month at their own bank's ATMs. In addition, in metro cities, they will be eligible for three free transactions from other banks, and in non-metro locations, they will be eligible for five free transactions. The modifications were announced by the RBI in June of this year.

What Did the Reserve Bank of India Say About ATM Transactions?

"Customers are eligible for five free transactions (inclusive of financial and non-financial transactions) every month from their own bank ATMs. They are also eligible for free transactions (inclusive of financial and non-financial transactions) from other bank ATMs, viz. three transactions in metro centres and five transactions in non-metro centres. Beyond the free transactions, the ceiling / cap on customer charges is Rs 20 per transaction, as prescribed vide circular DPSS.CO.PD.No.316/02.10.002/2014-2015 dated August 14, 2014. To compensate the banks for the higher interchange fees and given the general escalation in costs, they are allowed to increase the customer charges to Rs 21 per transaction. This increase shall be effective from January 1, 2022," said the Reserve Bank of India in a notification dated June 10, 2021.

"These instructions shall also apply, mutatis mutandis, to transactions done at Cash Recycler Machines (other than for cash deposit transactions)," further said the central bank, adding that additional taxes will be payable on this amount.

Banks to Notify Customers About the New Rule

Customers will be notified about the new rules by their banks.

The new notification has been posted on the websites of a few institutions, including HDFC Bank and Axis Bank.

"With effect from January 1, 2022, the ATM transaction charge rate beyond the free limit of Rs. 20 + taxes would be revised to Rs. 21 + taxes, wherever applicable," says the HDFC Bank website.

"For transactions at HDFC Bank ATMs, only cash withdrawal transactions will be considered for charging. Non-Financial Transactions (Balance Enquiry, Mini Statement, and PIN Change) will be free. For transactions at non-HDFC Bank ATMs, transactions considered for charging will include both financial (cash withdrawal) and non-financial transactions (balance enquiry, mini statement, and PIN change)," it adds.

According to the Axis Bank website, "Effective January 1, 2022, all financial transaction fees above the free limit in Axis Bank or other bank ATMs will be INR 21 + GST."

The last time the RBI increased the transaction limit was in August 2021, following a seven-year hiatus. It was noted that the interchange fee structure for ATM transactions was last changed in August 2012, while customer costs were last amended in August 2014. The bank stated that it had been a long time since these costs were modified.