ATM cash withdrawals to be costlier from January: Here’s how much you have to pay

New Delhi: After their limit to withdraw money from their own banks' ATMs is exhausted, bank users with a credit or debit card will be entitled to pay extra fees for cash withdrawals at ATMs around the country starting next month. In a previous notification, the Reserve Bank of India stated that after the limit is exceeded, users will be charged even greater fees for ATM transactions beginning in January 2022.

Customers are already being notified of this move by banks. Because the RBI has permitted banks to boost charges on cash and non-cash automated teller machines (ATMs) beyond the free monthly limitations, ATM transactions are poised to become more expensive.

Customers will have to pay Rs 21 per transaction at their own banks' ATMs to withdraw money once the limit has been exceeded once the change is implemented. If the identical situation occurs, a bank customer currently pays Rs 20 each transaction.

Before these charges are charged, the Reserve Bank of India permits all bank clients to make five free ATM transactions at their own banks. According to the central bank, the new rule will take effect on January 1, 2022. Customers using debit cards, on the other hand, will be entitled to five free transactions (cash or non-cash) per month at their own bank's ATMs. 

In addition, in metro cities, they will be eligible for three free transactions from other banks, and in non-metro cities, they will be eligible for five free transactions. The modifications were announced by the RBI in June of this year.

"Every month, customers are entitled to five free transactions (both financial and non-financial) from their own bank ATMs. They are also entitled to three free transactions (including financial and non-financial transactions) from other bank ATMs in metro areas and five free transactions in non-metro areas,” RBI said.

“The ceiling / cap on customer charges is Rs 20 per transaction, as defined by circular DPSS.CO.PD.No.316/02.10.002/2014-2015 dated August 14, 2014. Banks are authorised to raise consumer charges to Rs 21 per transaction to compensate for the higher interchange fee and the general increase in costs. The rise will take effect on January 1, 2022,” according to an announcement issued by the Reserve Bank of India on June 10, 2021.

"These instructions shall also apply, mutatis mutandis, to transactions made at Cash Recycler Machines (other than cash deposit transactions)," the central bank added, noting that additional taxes would be due on this sum.

New Rule

The new notification has been posted on the websites of a few banks, including HDFC Bank and Axis Bank.

“With effect from 1st January 2022, ATM transaction charge rate beyond free limit of Rs. 20 + taxes would be revised to Rs. 21 + taxes, wherever applicable," HDFC Bank website read.

“For transactions at HDFC Bank ATMs, only Cash withdrawal transactions will be considered for charging. Non-Financial Transactions (Balance Enquiry, Mini Statement & PIN Change) will be free. For transactions at Non HDFC Bank ATMs, transactions considered for charging will include both Financial (Cash Withdrawal) and Non-Financial Transactions (Balance Enquiry, Mini Statement & PIN Change)," it added.

The Axis Bank website read, “Effective 1st January 2022, financial transaction fee above the free limit in Axis Bank or other bank ATMs will be INR 21 + GST.”

The last time the RBI increased the transaction limit was in August 2021, following a seven-year hiatus. It was noted that the interchange fee structure for ATM transactions was last changed in August 2012, while customer costs were last amended in August 2014. The bank stated that it had been a long time since these costs were modified.