New Delhi, Mar 25: Starting May 1, withdrawing cash from ATMs in India will become more expensive as the Reserve Bank of India (RBI) has approved an increase in ATM interchange fees.

This means customers who rely on ATMs for their financial transactions will have to pay additional charges once they exceed their free transaction limit.

An ATM interchange fee is a charge that one bank pays another for providing ATM services. This fee, which is usually a fixed amount per transaction, is often passed on to customers as part of their banking costs.

The RBI decided to revise these charges following requests from white-label ATM operators, who argued that rising operational expenses were affecting their business.

The increase in charges will apply nationwide and is expected to impact customers, particularly those from smaller banks.

These banks rely on larger financial institutions for ATM infrastructure and related services, making them more vulnerable to rising costs.

From May 1, customers will have to pay an additional Rs 2 for each financial transaction beyond the free limit.

For non-financial transactions, such as balance inquiries, the fee will increase by Rs 1. As a result, withdrawing cash from an ATM will cost Rs 19 per transaction, up from the earlier Rs 17.

Checking account balances will now cost Rs 7 per transaction, according to the official notification.

ATMs, once seen as a revolutionary banking service, have been struggling in India with the rise of digital payments.

The convenience of online wallets and UPI transactions has significantly reduced the need for cash withdrawals.

Government data shows that digital payments in India were valued at Rs 952 lakh crore in FY14. By FY23, this figure had jumped to Rs 3,658 lakh crore, reflecting a massive shift towards cashless transactions.

With this new fee hike, customers who still rely on cash transactions may feel the burden, further pushing them toward digital alternatives.

(IANS)

read more Business News

Argus News | argus news | Odisha Latest News, Breaking News, Trending News, Live TV