ATM: Do You Have to Pay Rs 173 per Transaction after 4 Withdrawals in a Month? Govt Clarifies

ATM Withdrawal Rule: The Reserve Bank of India has its guidelines when it comes to withdrawing money from ATMs or do non-financial transactions using them. There is a monthly cap on free ATM transactions for all debit and credit card holders, after which they have to pay certain fees. The guidelines were last revised in January this year. However, there has been some chaos regarding the transaction fee rules at ATMs in the recent times, which the government has ruled out as fake news.

What is the Claim?

A message is being circulated across social media that Rs 173 will be deducted for more than four withdrawals from ATMs from now on. The message says that if you transact for more than four times in an ATM, you will have to pay Rs 150 as tax plus Rs 23 as service charge, and from June 1 the you will have to pay Rs 150 for every transaction at banks.

The Reality

The Press Information Bureau has released its fact check regarding this claim. “This claim is false. Five free transactions can be done every month from your bank’s ATM. After this maximum Rs 21/transaction or any tax will have to be paid separately,” it has said in a tweet.

What is the Real ATM Withdrawal Rule?

As per the RBI, the central bank had constituted a Committee in June 2019 under the Chairmanship of the Chief Executive, Indian Banks’ Association to review the entire gamut of Automated Teller Machine (ATM) charges and fees with particular focus on interchange structure for ATM transactions.

In June 2021, the RBI reviewed these transaction charges, citing that a significant time had passed since they were last revised. “A substantial time has thus elapsed since these fees were last changed. Accordingly, given the increasing cost of ATM deployment and expenses towards ATM maintenance incurred by banks / white label ATM operators, as also considering the need to balance expectations of stakeholder entities and customer convenience, it has been decided as under,” it had said at the time.

Customers are eligible for five free transactions (inclusive of financial and non-financial transactions) every month from their own bank ATMs. They are also eligible for free transactions (inclusive of financial and non-financial transactions) from other bank ATMs viz. three transactions in metro centres and five transactions in non-metro centres. “Beyond the free transactions, the ceiling / cap on customer charges is Rs 20 per transaction. 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. This increase shall be effective from January 1, 2022,” it said.

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