Cash Withdrawals from ATM will be Costlier from next month

Cash Withdrawals from ATM will be Costlier from next month

As per changes in the rules of the Reserve Bank of India (RBI), Cash Withdrawals from ATM will be Costlier from next month. The new RBI rule is going to start from the coming January 01, 2022, month. Customers from metro cities are eligible for three free ATM cash withdrawals. Customers from non-metro cities are eligible for five free ATM cash withdrawals. When the limit for free ATM cash withdrawal is exceeded, the bank will charge for the next ATM cash withdrawal.

What is the new Rule of RBI for Cash Withdrawals from ATM

Bank Customers with a Credit and Debit Card will be eligible to pay extra charges for the withdrawal of cash from the ATM across the country after the free limit exceeds. From the next months, 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 banks’ ATMs. Three transactions in metro cities and five transactions in non-metro cities.

When the free cash withdrawals limit will exceed, Banks will charge ₹21 per financial transaction and ₹8.5 per non-financial transaction. Currently, Banks are charging ₹20 per financial transaction and ₹6 per non-financial transaction. The transactions charges hicked only ₹1 for both financial and non-financial transactions. According to RBI to compensate the banks for higher interchange fees and given the general escalation in costs. They are allowed to increase the customer charges to ₹21 per transaction.

No. of free transactions in HDFC Bank No. of free transactions in other Bank Charges beyond the prescribed limit of free transactions
At Metro ATMs: 5 Free Transactions At Metro ATMs : 3 Free TransactionsCash Withdrawal – Rs 21/-
At Non-Metro ATMs: 5 Free Transactions At Non-Metro ATMs: 5 Free TransactionsNon-Financial Transaction – Rs 7/-

Banks Notify Customers About New Rule

A few banks, including HDFC Bank and Axis Bank, have updated their website with the new notification.

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

“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 adds.

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

Before this, the RBI had last increased the transaction limit in August 2021, after a gap of seven years. It observed that the last change in interchange fee structure for ATM transactions was in August 2012, while the charges payable by customers were last revised in August 2014. A substantial time has thus elapsed since these fees were last changed, the bank noted.

How many free Cash Withdrawals from ATMs are allowed?

Three transactions in metro cities and five transactions in non-metro cities.

How many free Cash Withdrawals from other ATMs are allowed?

Three transactions in metro cities and five transactions in non-metro cities.

How many charges will be applicable when the free limit exceeds it?

Banks will charge ₹21 per financial transaction and ₹7 per non-financial transaction.

When will the new Rule of RBI for Cash Withdrawals from ATMs be started?

The new Rule of RBI for Cash Withdrawals from ATM will be started from Jan 01, 2022

What is Financial Transaction?

Cash Withdraw, Cash Deposit, Fund Transfer come under the Financial Transaction.

What is Non-Financial Transaction?

Mini Statement, Pin Generation, Balance Check, Mobile No. The update comes under the Non-Financial Transaction.

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