These changes in banking sector to start in May; will ATMs disappear soon?

Banking service charges are being increased as part of a drive to encourage digital transactions by restricting customers from visiting branches and using ATMs. The aim is to phase out the use of paper currency. As part of this, the Reserve Bank of India has allowed banks to reduce the number of free ATM transactions and increase the fees for additional transactions from May 1. Banks have clarified that only three transactions will be free in metro cities and five in other places.

The fee for transactions above this will increase from Rs 21 to Rs 23. Tax will also be charged from customers along with this. The Reserve Bank of India's new ATM usage guidelines state that the limit will apply to financial services such as cash withdrawals and deposits, as well as non-financial transactions such as balance inquiries. The new limit will also apply to depositing money through Automated Deposit cum Withdrawal Machine (ADWM).

Meanwhile, HDFC Bank has clarified that it will not charge any charges for using non-financial services. Punjab National Bank has announced that it will charge Rs 11 plus tax for using non-financial services beyond the limit.

Goal: Complete digitalization

The Reserve Bank of India is restricting the number of free transactions with the aim of promoting digital transactions in the banking sector. It is also estimated that with the increase in the cost of ATM transactions, customers will use internet banking, mobile banking, UPI, credit cards, etc. more.

Money withdrawals through ATMs declining

According to Reserve Bank of India (RBI) data, ATM money withdrawals have been declining continuously for the past three years. In January 2023, money withdrawal transactions through ATMs were 57 crore. This fell sharply to 52.72 crore in January 2024 and 48.83 crore in January this year.