The Reserve Bank of India (RBI) has permitted banks to raise ATM transaction fees. Customers who go over their monthly free transaction limit will be charged ₹23 per transaction from May 1. The charge is currently ₹21.
Customers have a right to five free transactions per month on their bank's ATM, whether in the form of cash withdrawals, balance checking, or mini statements. The limit of free transactions at a non-bank ATM is five in metro locations and three in non-metro cities. Transactions exceeding this amount will be charged.
Impact of Digital Payments on ATMs
ATMs, which used to be the most important segment of banking, are now undergoing decreased usage thanks to the upsurge of digital payment mechanisms. UPI transactions and online wallets have made cash withdrawals slow down.
Government statistics reveal that digital payments were worth ₹952 lakh crore in 2013-14 and rose to ₹3,658 lakh crore by 2022-23. The hike in ATM transaction fees could further compel consumers to use digital payment modes. Experts are of the view that increased charges are likely to deter cash withdrawals and encourage digital payments.
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