Cash Withdrawals to Cost More as RBI Hikes ATM Interchange Fee

Cash withdrawals from ATMs will become costlier in India as the Reserve Bank of India (RBI) has increased interchange fees. The changes will be effective from May 1. The proposal for revision was made by the National Payments Corporation of India (NPCI).

What is an Interchange Fee?

An ATM interchange fee is a charge that one bank pays to another for offering ATM services to its customers. The fee eventually gets passed on to the ATM users.

What's Behind RBI's Move?

The central bank's move to revise the interchange fees comes after a request from the white-label ATM operators to raise the charges. The operators argued that rising operational expenses were impacting their business especially with the rise of digital payments.

How will it impact you?

The revision of interchange fee will impact ATM transaction charges, including cash withdrawal fee and balance inquiry fee.

Cash withdrawal fee: Rs 17 - Rs 19 per transaction

Balance inquiry fee: Rs 6 - Rs 7 per transaction

When will it be applicable?

The revised charges will levied once customers will exhaust their monthly limits i.e. five transactions in metro cities and three in non-metro areas at other banks' ATMs.

Push for Digital Alternatives

With the revised charges, customers who rely on cash transactions may feel the pressure on their pockets and are likely to transition towards digital alternatives.