From May 1, 2025, the Reserve Bank of India (RBI) has announced an increase in allegations of ATM withdrawal. This change will affect customers who often use ATMs for financial transactions, leading to high cost to cross their free transactions. Here you need to know about the new fees and what does it mean.
New ATM Withdrawal Fee: ₹19 per Transaction
Under the new regulation, customers will now need to pay Of 19 for each cash withdrawal from ATMs, when they exceed their free transactions limit. Previously, the fee was set to ₹ 17, which means that to withdraw money from ATMs, there will be an increase of ₹ 2 per transaction.
Increased Fees for Non-Financial ATM Transactions
In addition to the cash withdrawal fee, an increase in ATM balance inquiry fee will also be seen. Customers will now be charged a fee of ₹ 7 for checking the balance of their account with a previous fee of ₹ 7. This fee applies to non-financial transactions such as balance inquiry, mini statement, and more.
What Is ATM Interchange Fee?
The ATM interchange fee is a fee that pays another to provide ATM services. This fee is often passed as part of their banking cost to customers. The increase in ATM interchange fee will apply to all customers who are more than their free transactions in ATMs.
How Many Free ATM Transactions Can You Make?
RBI allows customers a limited number of limited ATM transactions each month. These boundaries vary depending on the location:
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Metro cities: 5 free transactions per month.
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Non-metro cities: 3 free transactions per month.
Once this limit is crossed, customers will have to pay the additional fee mentioned above.
Why Did RBI Increase ATM Charges?
An increase in ATM fee follows a request from white-labeled ATM operators, who argued that the rising operating costs were affecting their business. As a result, the RBI decided to amend the allegations, which will be applicable nationwide. This decision is likely to affect customers of small banks, which depend on large financial institutions for ATM infrastructure.
Impact of Digital Payments on ATM Services
With the rise of digital payments in India, there has been a decrease in demand for ATM withdrawal. The popularity of online wallet, UPI transactions and cashless payments has significantly reduced dependence on ATMs. According to government data, in FY 23, 3,658 lakh crore digital payment was made, there was a faster increase in FY 2014 by ₹ 952 lakh crore. This change towards digital transactions is contributing to a decline in ATM use.
Record Number of UPI Transactions in February 2025
In February 2025, 1611 crore transactions were done through Unified Payment Interface (UPI). During this period, a total amount of Rs 21.96 lakh crore was transferred. The number of transactions has increased by 33% on an annual basis.
