The Reserve Bank of India(RBI) approved a hike in ATM interchange fees. The rise in charges, effective May 1, includes a ₹2 hike for financial transactions and ₹1 for non-financial ones. Interchange fees are paid by a customer’s bank (Bank A) to the bank that the ATM belongs to (Bank B), whenever the Bank A customer uses Bank B’s ATM.
The move comes after various reports last month hinting that the National Payments Corporation of India (NPCI), recommended a slew of transaction fee raises to the RBI, including lifting the maximum cap for cash transaction fees and the ATM interchange fees for both cash and non-cash transactions.
White-label ATM players and banks supported the move by the NPCI. The cost of operating ATMs shot up sharply in non-metro areas due to rising inflation, higher borrowing costs over the last couple of years, and an in-tandem rise in costs involved in transportation, replenishing cash, and compliance.
This time, cash withdrawals and other financial transactions would attract an ATM interchange fee of ₹19 versus the earlier ₹17, while non-financial transactions, such as mini-statement requests and balance checks, would now attract a fee of ₹7 compared to the earlier ₹6. This hike would be more relevant to small banks and ATMs in rural areas, where customers may not take lightly the hike in fees.
