Here's how you can avoid ATM interchange fees

With RBI increasing ATM fees, users can opt for digital transactions or switch to banks that reimburse charges

- BENN KOCHUVEEDAN @Mumbai

LAST week, the Reserve Bank of India (RBI) allowed banks to increase the fees they charge to customers for using the automated teller machines (ATMs) or cash vending machines by ₹2 to ₹23 per transaction above the currently permissible limits.

The new charges will be effective from May 1. The fee revision follows requests from white-label/standalone/non-bank ATM operators, who sought higher withdrawal charges due to increasing operational costs affecting their business.

Called ATM interchange fee, all ATM transactions are charged to the respective banks for offering services to customers. Banks typically pass this cost on to customers.

For instance, while SBI, which has the largest branch and ATM networks, makes huge profit from such interchange charges—the latest number is around ₹380 crore—most others like Bank of Baroda book the maximum losses among public sector banks.