ATM withdrawals may cost more from May 1 after RBI agrees to raise interchange fee

The Reserve Bank of India (RBI) has approved an increase in ATM interchange fees by Rs 2 for financial transactions and Re 1 for non-financial transactions and the revision will be effective from May 1, the Financial Express has said.

The cash withdrawal fee will go up to Rs 19 from Rs 17 per transaction, and the balance check fee will go up to Rs 7 from Rs 6 per transaction, the report said.

An ATM interchange fee is a charge that one bank pays to another for offering ATM services to customers.

The move is likely to have a huge impact on smaller banks with limited ATM network.

Before this, RBI revised the interchange fee in June 2021

Banks have not yet decided on whether the customers would bear the brunt. “Whenever interchange fees were revised over the past 10 years, banks always passed the changes on to customers. This time will be no different, and banks are expected to hike fees for customers,” a the report quoted a senior banker as saying.

Moneycontrol couldn't independently verify the report.The hike in interchange fee was done following requests from white-label ATM operators who had been finding it difficult to run operations under the current fee structure, the report added quoting sources.