Using your debit card at ATM about to get costly from next month; here is why

Using your debit card to withdraw cash at an ATM will cost more from next month once you exhaust your montly free transactions.

Customers will have to pay Rs 21 per transaction even if they use their home bank’s ATM once the limit exceeds.

The Reserve Bank of India, in a notification earlier, had said that customers will have to pay even more charges from January 2022 for ATM transactions once the limit exceeds. Banks are already notifying this change to remind customers of it. ATM transactions are set to get costlier because the RBI had allowed banks to increase charges on cash and non-cash automated teller machines (ATMs) beyond free monthly limits.

Once the change is implemented, customers will have to pay Rs 21 per transaction at their own banks’ ATMs to withdraw money once the limit exceeds. Currently, a bank customer pays Rs 20 per transaction if the same situation arises. The Reserve Bank of India allows all bank customers to do five free ATM transactions at their own banks before these rates are charged. The new rule will come into effect from January 1, 2022, as per the central bank. However, all bank customers with debit cards will be eligible for five free transactions (cash or non cash transactions) at their own banks’ ATMs per month. Additionally, they will be eligible for three free transactions from other banks in metro cities and five free transactions in non-metro cities. The RBI had notified about the changes in June this year.

What Exactly did the RBI Say About ATM Transactions?

“Customers are eligible for five free transactions (inclusive of financial and non-financial transactions) every month from their own bank ATMs. They are also eligible for free transactions (inclusive of financial and non-financial transactions) from other bank ATMs viz. three transactions in metro centres and five transactions in non-metro centres. Beyond the free transactions, the ceiling / cap on customer charges is Rs 20 per transaction, as prescribed vide circular DPSS.CO.PD.No.316/02.10.002/2014-2015 dated August 14, 2014. To compensate the banks for the higher interchange fee and given the general escalation in costs, they are allowed to increase the customer charges to Rs 21 per transaction. This increase shall be effective from January 1, 2022,” said the Reserve Bank of India in a notification dated June 10, 2021.

“These instructions shall also apply, mutatis mutandis, to transactions done at Cash Recycler Machines (other than for cash deposit transactions),” further said the central bank, adding that additional taxes will be payable on this amount.