You will have to pay more for ATM transactions from January 1; here's how much and why

As per the new RBI directives, banks would be able to levy charges on customers within this ceiling, once they exhaust the free transaction limit.

“To compensate the banks for the higher interchange fee and given the general escalation in costs, they are allowed to increase the customer charges to Rs 21 per transaction,” RBI had said in a statement.

HDFC Bank and Axis Bank have already started informing customers about the development.

According to the HDFC Bank website, the ATM transaction charge rate beyond the free limit of Rs 20 + taxes will be changed to Rs 21 + taxes as of January 1, 2022.

As per the Axis Bank website, “Effective January 1, 2022, financial transaction fee above the free limit in Axis Bank or other bank ATMs will be Rs 21 + GST.”

In August 2021, the interchange fee, the fee that the merchant bank pays to the card-issuing bank each time a customer swipes their credit or debit card, was also hiked. Customers are now supposed have to pay Rs 17 instead of Rs 15 as an interchange fee per transaction through ATMs for financial transactions. The charges for non-financial transactions were hiked from Rs 5 to Rs 6.