ATM cash withdrawal New rules from 1 January 2022: Free withdrawal limit, new charges

Reserve bank of India changes the rules for ATM cash withdrawal from January 1, 2022. ATM Cash Withdrawal Charges to Increase from new year. Customers will have to pay more if they exceed the free ATM transaction limit from January 1, 2022.

This development come on the back of Reserve Bank of India (RBI) order that permitted banks to increase charges for cash and non-cash ATM transactions beyond the free monthly permissible limit. The central bank, in a June 2021 order, allowed banks to increase charges on ATM transactions to Rs 21 per transaction after people have exhausted the free transaction limit from January 1, 2022.

However, the customers will be allowed five free transactions, including financial and non-financial ones on a monthly basis from their own bank ATMs and they will be able to conduct three free transactions from ATMs of other banks in metro cities.

“Effective 1st January 2022, financial transaction fee above the free limit in Axis Bank or other bank ATMs will be INR 21 + GST,” noted Axis Bank.

1) According to the RBI notification, customers will have to pay Rs 1 more than what they were paying earlier to withdraw money

2) Starting 1 January 2022, customers will have to pay Rs 21 per transaction, instead of Rs 20 if they exceed the monthly limit of free transactions. “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,” the RBI had said in a circular.

3) However, all bank customers with debit cards will be eligible for five free transactions (cash or non-cash transactions) at their own banks’ ATMs per month.

4) Additionally, they will be eligible for three free transactions from other banks in metro cities and five free transactions in non-metro cities.

5) The Reserve Bank of India (RBI) has permitted banks to boost charges on cash and non-cash ATMs beyond the free monthly limitations.

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India Post Payments Bank (IPPB) account holders will have to bear charges on depositing cash in their accounts from the next year, if they exceed the prescribed limit. In the savings (other than Basic SA) and current accounts, the cash deposits will be free up to Rs 10,000 per month and thereafter, a charge of 0.50 percent of the value subject to minimum Rs 25 per transaction will be levied.