ATM Withdrawal: Withdrawing money from ATM in India is going to be expensive from May 1, as the Reserve Bank of India (RBI) has approved the increase in ATM interchange fees. According to the new rules of RBI, from May 1, customers will have to pay Rs 2 extra for each transaction after the free limit from ATM. Withdrawing cash from ATM will cost Rs 19 per transaction, which was Rs 17 earlier.

Withdrawing money from ATM in India is going to be expensive from May 1, as the Reserve Bank of India (RBI) has approved the increase in ATM interchange fees. This will mean that customers who use ATM more for their financial transactions will have to pay additional charges along with withdrawing money from ATM after a limit.

ATM interchange fee is paid by one bank to another bank for providing ATM services. This fee is a fixed amount for each transaction and is charged to the customers as banking cost.

According to the new RBI rules, from May 1, customers will have to pay Rs 2 extra for each transaction after the free limit from ATM. Withdrawing cash from ATM will cost Rs 19 per transaction, which was Rs 17 earlier.

Apart from this, if the customer uses the ATM for other purposes like balance inquiry other than withdrawing money, then Rs 1 extra will have to be paid. According to the official notification, checking the account balance will now cost Rs 7 per transaction, which is currently Rs 6.

RBI decided to revise these charges following requests from white-label ATM operators, who argued that rising operational expenses were affecting their business. The increase in the fee will be applicable across the country and is expected to impact customers, especially those of small banks. These banks depend on large financial institutions for ATM infrastructure and related services, making them more vulnerable to rising costs.

While ATMs were once seen as a revolutionary banking service, they are now struggling in India as digital payments grow. The convenience of online wallets and UPI transactions has significantly reduced the need for cash withdrawals.

Government data shows that the value of digital payments in India was Rs 952 lakh crore in FY14. By FY23, this figure is set to rise to Rs 3,658 lakh crore, indicating a massive shift towards cashless transactions. This new fee hike may feel the burden on customers who still rely on cash transactions.