Starting May 1, 2025, cash withdrawals from ATMs beyond the set free transaction limits will become more expensive. The Reserve Bank of India has approved a proposal by the National Payments Corporation of India (NPCI) to hike ATM transaction charges. With this, the fee for withdrawing cash from another bank’s ATM beyond the free limit will rise from ₹17 to ₹19, while the charge for checking account balance will increase from ₹7 to ₹9.
Free Transaction Limits Unchanged
Customers in metro cities will continue to get five free transactions per month at other banks’ ATMs, and those in non-metro cities will have three free transactions. Charges will apply once these limits are crossed.
Why Charges Are Increasing
The decision stems from requests by ATM operators and white label ATM companies who say their operating and maintenance costs have grown over time. NPCI’s request for a revision in interchange fees has now been accepted by the RBI.
Impact on Users and Banks
The increase is expected to impact banks that rely more heavily on other networks for ATM infrastructure. Customers using non-home bank ATMs more frequently will now face steeper costs. To avoid these charges, users are being encouraged to either withdraw cash from their home bank ATMs or shift to digital payment options.
SBI Has Already Made Changes
India’s largest bank, SBI, has already implemented revised ATM charges for its customers, effective from February 1, 2025. However, the broader nationwide fee hikes will apply across all banks beginning May.
A Recurring Debate
The move reignites the long-standing debate between customers’ expectations of free ATM access and the banking sector’s need to cover operational expenses. Previously, similar hikes had drawn criticism, including in Parliament, where concerns were raised about the potential discouragement of ATM usage. Despite this, the new charges are set to come into effect next month.
