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ATM Transaction Charges in India: 5 Things to Remember

atm transaction charges

The prevailing rules on ATM transactions in India came in to force on 1st November 2014. They include guidelines that impose certain restrictions on the number of ATM transaction in metro and non metro cities and levy charges on transactions made beyond the limit.

Click here to know the RBI guidelines on ATM Transaction charges

Here’s what you should know about the ATM transaction charges in India.

ATM Transaction in Metro Cities

The savings account holders are allowed only three ATM transactions in other bank ATMs and five in home bank ATM per month, if the ATMs are located in Mumbai, New Delhi, Chennai, Kolkata, Bengaluru and Hyderabad.

ATM Transaction in Non-Metro Cities

No changes have been made on the ATM transaction limit in non metro cities. Savings account holders can continue to enjoy five free ATM transactions per month.

Types of ATM Transaction

The stipulated number of free ATM transaction is inclusive of both financial and non financial transaction. This means whether you withdraw cash or request a mini statement or check balance, everything will be considered as ATM transaction. Earlier, the non financial transactions were not considered for the above purpose.

Accounts Exempted From Charges

The latest ATM transaction rules are not applicable to small, no-frill, and basic savings accounts.

ATM Transaction Charges Beyond Free Withdrawals

Irrespective of your location, once the total number of ATM transaction crosses the stipulated limit, a charge of Rs.20 will be deducted from the account per each transaction made thereafter. However, as per RBI’s instructions, banks are free to decide their individual charges for transaction beyond the free ones.

Reasons Behind the Change    

The rising cost of ATM maintenance due to deployment of arm guards, installation of cctv cameras and interchange fees was the main reason why RBI decided to laid down such unpopular rules.

According to Indian Banks Association, banks pay over Rs 15 per ATM transaction to each other irrespective of whether a withdrawal was within the limit in case of customers involved. Therefore, such rules are introduced to pay off the cost borne by banks with regards to ATM transactions to some extent.

So these are the rules that apply to ATM transactions in India. However, you can always control and reduce your ATM transaction charges. Our article titled ‘How to reduce ATM transaction charges in India‘ discusses some of the simple ways to help you in this matter.

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