ATM cash withdrawal charge would be more from tomorrow (January 1, 2022) for bank customers. The increased charge would apply in case of transactions beyond the free monthly permissible limit.
All banks provide a certain number of free cash withdrawals and other transactions at their ATMs every month, beyond which customers have to pay a small amount as charges. The banks are going to increase the charges for ATM cash withdrawal beyond the free limit in a month.
So if you are a frequent ATM visitor for cash withdrawal, it is advisable to limit the number of your ATM transactions in a month. The banks are changing rules for ATM withdrawal charges following an RBI decision.
What RBI said
The Reserve Bank of India had allowed banks to increase the charges for cash ATM transactions beyond the free monthly permissible limit.
“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…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,” the central bank had said in June 2021.
Several banks like HDFC Bank, ICICI Bank and Axis Bank have updated their website regarding changes in charges for cash and non-cash ATM transactions beyond the free monthly limit.
From January 1, you will have to pay Rs 21 per transaction instead of Rs 20 on exceeding the free monthly permissible number of transactions. So, for example, if you do five cash withdrawals transactions beyond the permissible limit, you will end up paying Rs 105 as charges to the bank in a month.
It would be better for bank customers to reduce dependency on cash and instead use online payment options like UPI for transactions.