ATM cash withdrawals to cost more? Operators seek hike in interchange fee

Despite an increase in digital payments, a lot of people still depend on banks as well as ATMs to meet their cash requirements. However, cash withdrawals from ATMs might get costlier for the people.

As per Business Today report, the Confederation of ATM Industry (CATMI) has approached the Reserve Bank of India (RBI) and the National Payments Corporation of India (NPCI) to request an increase in the interchange fee.

This fee is what customers are charged by banks after they exceed their free withdrawal limits at ATMs.

CATMI aims to raise the ATM withdrawal fee to a maximum of Rs 23 per transaction. This means that once users exceed their existing free withdrawal limits (5 withdrawals), they will be charged up to Rs 23 per transaction.

For instance, customers using SBI ATMs are now receiving messages after withdrawing cash, stating: "Dear Customer, you have used 1 out of your 3/5 free transactions at Non-SBI ATMs in Metro/Non-Metro centres this month. Charges apply beyond free transactions."

In 2021, the fee was increased from Rs 15 to Rs 17, with the upper limit set at Rs 21.

Different banks in India have varying maximum cash withdrawal limits. For some banks, it starts at Rs 10,000 per day and can go up to Rs 50,000 for premium clients.