If you withdraw money from ATM, then this news is important for you. ATM transactions are going to be expensive from May 1. The Reserve Bank of India (RBI) has approved an increase in ATM interchange fees, due to which you will now have to pay more money on cash withdrawals and other transactions. This change will especially affect those who do more cash transactions than digital payments.

What is an ATM interchange fee?

ATM interchange fee is the charge that a bank levies on its customer for withdrawing money or using other services from another bank's ATM. This fee is usually borne by banks, but often its burden is also put on the customer. Now after the new rate is implemented, banks can charge this extra charge from their customers.

Why did RBI make this decision?

RBI has made this change after the demand for white-label ATM operators and other banks. They said that they were incurring losses due to increased operational costs. This decision has been taken due to the increasing cost of maintaining ATMs, cash loading, and security measures.

Which customers will be most affected?

The increase in ATM transaction charges will affect those customers who are more dependent on cash withdrawals. Especially the customers of small banks will be affected by this because these banks depend on big banks for their ATM network. When these customers withdraw money from ATMs of other banks, they will have to pay more charges.

Apart from this, people who prefer cash transactions instead of digital payments will also be shocked by this change. Users who frequently withdraw money from ATMs for daily needs will now have to pay extra charges.

This decision will affect those customers the most, whose transaction volume is high. Every bank gives its customers the facility of some free transactions in a month, but after this limit is over, more charges will have to be paid on every additional transaction. In such a situation, customers who withdraw money more than the free transaction limit will be most affected.

What are the new ATM charges?

From May 1, withdrawing money from ATM i.e. cash withdrawal will become expensive. Now customers will have to pay extra charge on every transaction, which will have a direct impact on the pockets of those doing cash transactions.

If you do a financial transaction i.e. withdraw cash, then you will have to pay 2 rupees more charge per transaction. At the same time, non-financial transactions like checking balances, taking out mini statements or changing ATM PIN will now become 1 rupee expensive.

However, these new charges will be applicable only when you cross the free transaction limit of your bank. That is, if you have already completed the free transaction limit, then after that you will have to pay this increased charge on every extra transaction. Therefore, it will be important to keep in mind the transaction limit while using an ATM.

How to avoid extra charges for withdrawing money from an ATM?

Use digital payments more i.e. make payments through UPI, net banking, and mobile wallet. Withdraw more money at one go, avoid going to the ATM again and again so that extra charges are not levied. Use your bank's ATM only, withdrawing money from other bank's ATM attracts higher charges. Be aware of your bank's free transaction limit, because every bank has a different free limit.

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