What are the new regulation for cash withdrawals from ATM?


Customers that make more than the authorized “free” transactions at ATMs will have to pay extra starting January 1, 2022. From next year, the RBI has permitted commercial banks to increase charges for cash and non-cash ATM transactions above the free monthly allowable limit.

According to the RBI order, if a bank customer exceeds the monthly limit of free transactions, he or she would be charged Rs 21 instead of Rs 20 per transaction starting January 1, 2022.

The Reserve Bank of India (RBI) announced certain adjustments to the regulations for cash withdrawals from automated teller machines (ATMs) on Thursday. Higher fees for transactions that exceed the free permitted limit, a new free ATM transaction limit, and an increase in the interchange cost are among the modifications to ATM cash withdrawal rules.

Customers will be able to use their own bank’s ATM for five free transactions each month. For this aim, both financial and non-financial transactions will be counted. This implies that when you’ve used up your five free transactions, you’ll have to pay Rs 21 for a non-financial activity like checking your balance at your bank’s ATM! From next year, even if you take Rs 100 from your bank’s ATM for the sixth time (after five free transactions), you would be charged Rs 21.

Customers at other banks’ ATMs will be limited to three free transactions in metro areas and five free transactions in non-metro areas. After three free transactions in metro areas and five free transactions in non-metro centres, the additional price of Rs 21 will apply.

“Every month, customers are entitled to five free transactions (both financial and non-financial) from their bank ATMs. They are also eligible for free transactions (both financial and non-financial) from other bank ATMs, with three transactions in metro areas and five in non-metro areas, according to the RBI.

“Beyond the free transactions, the customer fee ceiling/cap is $20 per transaction, as per circular DPSS.CO.PD.No.316/02.10.002/2014-2015 dated August 14, 2014. Banks are authorized to raise client charges to $21 per transaction to compensate for the increased interchange fee and the overall rise in costs. The hike will take effect on January 1, 2022,” it continued.

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