Interchange Charges: Withdrawal charges from ATMs of other banks increase to Rs. Will be held from 20th to 23rd

After the Lok Sabha elections, withdrawing money from ATMs of other banks can be expensive. The cost of ATM i.e. Automated Teller Machine in the banking sector is now being reconsidered. According to which, now the fee (interchange charge) for withdrawing money or doing transaction from another bank’s ATM can be increased from Rs 20 to Rs 23. Apart from this, additional convenience fee may be charged for withdrawing excess cash. In areas where bank branches or ATMs are less, consideration is also being given to keeping the charges low, so that the beneficiaries of Direct Benefit Transfer can easily withdraw money from the associated ATMs. According to banking sources, this issue was discussed in the recent meeting between ATM Industry Association (CATMI) and the Reserve Bank. The fee review report comes at a time when 45,000 new ATMs and cash recycling machines have been ordered from September 2023 to March 2024. This order is six times compared to the last six months.

This number is more than the number of ATMs installed in the country since demonetization in November 2016. At the time of demonetization there were about 2.25 lakh ATMs in the country and currently the number is 2.60 lakh. This means that in the last seven years the number of ATMs in the country has increased by only 35,000.

A committee headed by VG Kannan, then CEO of the Indian Banks Association, submitted a report on October 22, 2019, to review the ATM interchange fee regime. Interchange fee is charged when a customer makes a card transaction from another bank’s ATM. Which was earlier Rs 15 per transaction. Which was increased to Rs 17 from August 1, 2021. The fee on non-cash transactions has been increased from Rs 5 to Rs 6. The ATM interchange fee was Rs 18 in 2012, which was later reduced to Rs 15.

Why may fees increase?

The cost has increased due to ATM center space rent, fuel cost, cash withdrawal charges and compliance with the security norms of the Home Ministry. After the ban of Rs 2000 notes, more number of notes have to be filled in the ATM. The industry was ready to increase the interchange fee to Rs 20 but it is believed that now the fee can be increased to Rs 23 to recover the cost of changing cassettes.