ATM Withdrawal Fees May Rise Soon: Here’s What We Know

New Delhi (The Uttam Hindu): If you frequently withdraw cash from ATMs or prefer cash payments over digital transactions, this news is significant for you. The Reserve Bank of India (RBI) is contemplating a hike in the fees for ATM cash withdrawals. Currently, the RBI allows five free withdrawals per month from ATMs. However, it is now planning to increase the charges for transactions exceeding this limit, as well as raise the ATM interchange fee.

According to a report by *Hindu Business Line*, ATM users may soon have to pay more for withdrawing cash. The National Payments Corporation of India (NPCI) has recommended raising the charge for cash withdrawals beyond the five free transactions from the existing Rs. 21 to Rs. 22. Additionally, NPCI has proposed increasing the ATM interchange fee for cash transactions from Rs. 17 to Rs. 19. The interchange fee is applicable when customers withdraw money from an ATM of another bank beyond a certain limit. This fee is paid by one bank to another for the use of its ATM services.

The report further states that banks and white-label ATM operators in both metro and non-metro cities have agreed to NPCI's recommendation to increase the fees. However, both the Reserve Bank of India and NPCI have yet to make an official statement on the matter. The rise in ATM operating costs in non-metro cities has been attributed to increasing inflation, a 1.5-2 percent rise in borrowing costs over the past two years, higher transportation expenses, and the costs associated with cash replenishment and maintenance. These factors have contributed to a rapid increase in ATM operating costs in these areas.