The card issuing bank pays an interchange fee to the ATM operator when a customer makes a transaction at an ATM that does not belong to the bank that issued the card. Currently, the bank that issued the card pays an interchange fee of Rs 15 for each cash transaction and Rs 5 for each non-cash transaction.
ATM operators have long pushed for increased interchange, but banks weren't on the same line as the additional cost would ultimately be borne by customers. The RBI had, in June 2019, formed a committee to review the full range of ATM fees and commissions with a focus on the interchange structure for ATM transactions.
“The committee's recommendations have been thoroughly reviewed. It is also noted that the last change in the structure of interchange fees for ATM transactions took place in August 2012, while the fees payable by customers were last revised in August 2014. Considerable time has therefore passed since. the latest change in these fees, "said the RBI. Revision of interchange fees for ATM transactions.
RBI also said customers will be entitled to five free transactions, which include financial and non-financial transactions, each month from their bank ATMs. In addition, they will be entitled to three free transactions (both financial and non-financial) from ATMs of other banks in metropolitan cities. In non-metropolitan centers, customers will be able to carry out five transactions (financial and non-financial) from other bank ATMs.
In addition to the prescribed number of free transactions a customer can make from other bank ATMs, 20 rupees are currently charged per transaction. However, the RBI has now increased this interchange fee from Rs 20 to Rs 21 per transaction, starting January 1, 2022.