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RBI increases ATM interchange fee
June 11, 2021
The Reserve Bank of India (RBI) on Thursday increased the interchange fee on automated teller machine (ATM) transactions from ₹15 to ₹17. It has likewise hiked the fee on non-financial transactions from ₹5 to ₹6. This modified rate will become effective from August 1, 2021. ATM trade is the charge paid by the bank that gives the card (backer) to the bank where the card is used to withdraw cash (acquirer).
The ATM transaction fee has been a bone of contention between banks and ATM organization organizations. The charge is divided between the acquirer and the ATM organizations. This is why banks issuing ATM cards deter clients from using other banks’ ATMs.
In addition to this cap, the cap on the fee that can be charged to the client, which is covered at ₹20 per exchange, was additionally expanded. “To repay the banks for the higher trade fee and given the overall acceleration in costs, they are permitted to build the client charges to ₹21 per transaction,” the RBI said. This increase will be effective from January 1, 2022.
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