ATM Rule Change: Withdrawing Cash to Get Costlier from May 1 – Here’s the New Transaction Fee
Starting May 1, 2025, withdrawing cash from ATMs could become more expensive, especially if you're using ATMs of banks other than your own.
Starting May 1, 2025, withdrawing cash from ATMs could become more expensive, especially if you’re using ATMs of banks other than your own. The Reserve Bank of India (RBI) has approved a hike in ATM interchange fees that will directly impact customers’ pockets. Here’s a breakdown of what’s changing.
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What Are Interchange Fees and Why Are They Increasing?
The interchange fee is the amount paid by the card-issuing bank to the ATM-operating bank when a customer withdraws money from an ATM that doesn’t belong to their home bank. Following a proposal by the National Payments Corporation of India (NPCI), the RBI has approved a fee hike in view of rising operational costs and the demands of white-label ATM operators.
New ATM Charges from May 1, 2025
Under the revised guidelines:
- Cash withdrawal fee will increase from ₹17 to ₹19 per transaction at non-home bank ATMs.
- Balance inquiry fee will go up from ₹6 to ₹7 at ATMs outside the home bank network.
These charges will apply after the free transaction limit is exhausted.
White-Label ATMs and the Push for Fee Hike
White-label ATMs, operated by non-banking financial companies (NBFCs) instead of banks, have been pushing for a hike in fees due to increased maintenance and operational costs. The new fee structure is expected to benefit these operators but may put smaller banks under pressure, as they rely heavily on other banks’ ATM networks.
Free ATM Transaction Limits – What You Should Know
The charges will apply only after you exhaust your free monthly ATM transaction limit:
- In metro cities, customers are allowed 5 free transactions per month from non-home bank ATMs.
- In non-metro areas, the limit is 3 free transactions per month.
Why It Matters for You
If you’re someone who frequently uses ATMs outside your bank’s network, especially in areas where your bank doesn’t have sufficient infrastructure, you will likely incur more charges starting in May. It’s advisable to monitor your transactions and plan your cash withdrawals strategically to avoid unnecessary fees.
