The Reserve Bank of India (RBI) has permitted banks to increase charges on ATM cash withdrawals beyond the free transaction limit. This decision comes in response to rising operational costs, including ATM maintenance, security, and cash handling expenses.
According to the revised guidelines, customers exceeding the permitted number of free ATM withdrawals per month will have to pay a higher transaction fee. The move is aimed at helping banks manage the costs associated with providing ATM services while also encouraging the adoption of digital transactions.
As per the current banking norms, customers of most banks get a limited number of free transactions per month at their own bank’s ATMs as well as at ATMs of other banks. Once this limit is exceeded, a transaction fee is charged. With RBI’s latest decision, this fee is set to increase, impacting frequent cash users.
The revised charges are expected to come into effect from a specified date, with banks issuing detailed notifications to customers regarding the new fee structure. While the RBI has taken this step to address the growing cost burden on banks, consumer advocacy groups have raised concerns about the impact on individuals who rely heavily on cash transactions.
The move is also seen as part of a broader strategy to encourage digital payments and reduce dependency on cash. However, experts suggest that the RBI should ensure a balance between banks’ financial sustainability and customer convenience.
Customers are advised to check with their respective banks for updated ATM withdrawal charges and explore alternative digital payment methods to avoid additional costs.
