Nowadays most of the people withdraw cash from ATM. Instead, they have to pay a fixed service charge. Recently, the Reserve Bank of India (RBI) had increased the interchange fee, due to which now financial transactions will have to pay more charges than before. The new rule will come into effect from August 1, 2021.
Under this, the interchange fee for financial transactions has been increased from Rs 15 to Rs 17, while for non-financial transactions it has been increased from Rs 5 to 6. According to RBI, customers are eligible for five free transactions from their bank’s ATMs every month, which includes financial and non-financial transactions. They are also eligible for free transactions from other bank’s ATMs, which includes three transactions in metros and five transactions in non-metropolitan cities.
What is the interchange fee
Interchange fee is a fee charged by banks to merchants processing payments through credit cards or debit cards. If a customer of one bank withdraws money from another bank’s ATM using his card, then the bank from whose ATM the money is withdrawn becomes a merchant bank.
Customer charges will also increase
The customer charge limit is currently Rs 20 per transaction, which will be increased to Rs 21 with effect from January 1, 2022. Keeping in view the banks to compensate the higher interchange charges and general increase in cost, RBI has allowed banks to increase the customer charges per transaction. This increase will be effective from January 1, 2022.
ICICI Bank issued notice
ICICI Bank has issued a notice on revised limits for cash transactions, ATM interchange and checkbook charges. The revised charges will be applicable from August 1 for domestic savings account holders including salary accounts.
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