Starting May 1, 2025, withdrawing cash from ATMs will cost you more as the Reserve Bank of India (RBI) has approved a revision in ATM transaction fees. The new charges will apply to both financial and non-financial transactions, affecting millions of bank customers across the country.
The RBI has sanctioned a hike in interchange fees, which are charges banks pay each other when customers use ATMs of banks other than their own. Here’s what’s changing:
Financial transactions: The fee is increasing by ₹2, from ₹17 to ₹19 per transaction.
Non-financial transactions (like balance inquiries, mini-statements, and PIN changes): The charge will rise from ₹6 to ₹7 per transaction.
Customers are allowed a limited number of free ATM transactions each month, beyond which additional charges apply. Here are the current limits:
Metro cities: Up to 5 free transactions (both financial and non-financial combined) at ATMs of different banks.
Non-metro areas: Only 3 free transactions are permitted.
Once these free transactions are exhausted, customers will have to pay the revised fees as per the RBI’s new structure.
The interchange fee is a charge that a bank pays to another bank when its customer uses an ATM that does not belong to their own bank. This fee compensates the ATM-operating bank for maintenance and operational costs. The last time these fees were revised was in June 2021, making this the first major update in nearly four years.
With ATM withdrawal fees increasing, here are some smart ways to minimize costs:
Use your home bank’s ATM: Transactions at your own bank’s ATMs remain free within the permitted limits.
Keep track of your withdrawals: Monitoring your transactions can help you avoid unnecessary fees.
Go digital: Opt for UPI payments, online banking, and mobile wallets to reduce dependency on cash withdrawals.
With digital transactions on the rise, this hike in ATM withdrawal charges is likely to push more customers toward online banking methods. However, for those who rely on cash withdrawals, it’s crucial to manage transactions wisely to avoid paying extra fees. If you frequently withdraw cash, consider planning transactions in advance to stay within free limits and minimize additional charges.
Stay informed and make smarter banking decisions to keep unnecessary costs at bay!
