Banks seek RBI approval to increase usage charges; may decrease free withdrawal limit

Using ATMs can soon get expensive. Banks have sought permission from the RBI to increase the ATM transaction charge. Banks have taken this step due to the financial burden of increasing ATM upgradation. RBI has instructed all banks to have ATM upgradation. Upgradation will increase the financial burden of banks. That is why they want to put their financial burden on customers. However, the RBI has not approved this yet. But, speculation is being made that ATM charges can be increased in the coming days.

Charge can increase in two ways

According to sources, banks can increase ATM transaction charges in two ways to recover the cost of ATM upgradation. After the first free transaction ends, the charge of 18 rupees charged currently can be increased to 23 rupees. Apart from this, the number of free transactions from ATM can also be reduced. Currently, private banks have just kept 3 transactions of other ATM free. At the same time, some banks have provided no charge for upto 5 other banks ATM transactions.

At the time of transaction from ATM, the charge can be increased from at least Rs. 3 to 5 rupees. This can lessen the cost of the burden from ATM operators ie bank upgradation. According to sources, the RBI has issued strict guidelines. In such a situation, if the fees were not recovered from the customers, there could be huge losses to the banks.

Upgradation in 6 phases

According to the Economic Times, the RBI had instructed to upgrade the ATM to prevent fraud and increasing hacking from ATMs. Bank ATM upgradation is to be completed in 6 phases. Its dead line is has also been decided. The first phase is to end in August 2018. This is the reason why banks can increase ATM charges by the end of July. The last phase of the ATM upgrade will end in June 2019.