Starting May 1, 2025, withdrawing money from an ATM will become more expensive.
The Reserve Bank of India (RBI) has decided to increase the fees for ATM transactions, meaning you’ll pay higher charges once your free transaction limit is exhausted.
1. Increased Charges
Cash withdrawal: The fee for withdrawing cash will rise from ₹17 to ₹19 per transaction.
Balance check: The fee for checking your balance will increase from ₹6 to ₹7.
These new fees will apply only after you’ve exceeded the free transaction limit.
2. Limit on Free Transactions
In metro cities, you can make 5 free transactions per month.
In non-metro cities, you are allowed 3 free transactions per month. After this limit, any transaction will attract the increased charges.
3. Other Banking Changes
Savings Account Minimum Balance: Banks like SBI, PNB, and Canara Bank are changing the minimum balance requirements, with different rules for cities, towns, and villages.
If you fail to maintain the required balance, a penalty will be charged.
Credit Card Benefits: SBI and IDFC First Bank are reducing the benefits on their Vistara credit cards, including ticket vouchers and renewal benefits.
Axis Bank will also update its Vistara credit card terms starting April 18, 2025.
4. What is ATM Interchange Fee?
The ATM interchange fee is a fixed amount that a customer’s bank pays to the bank operating the ATM when withdrawing money from a non-home bank’s ATM.
With the new changes, RBI has increased this fee, meaning banks may pass the extra cost onto customers.
5. Impact on Small Banks
Small banks, which often rely on the ATM networks of larger banks, will likely raise charges for their customers due to the increased interchange fees.
This could result in additional costs for customers of smaller banks.
Why Was This Decision Made?
The decision was made after white-label ATM operators, who run their own ATMs, requested the change.
They argued that their business was losing money because of the high costs involved in running ATMs.
What Should Customers Do?
These new changes will directly affect ATM users. To avoid extra charges, consider using UPI, net banking, and digital payments more often instead of withdrawing cash from ATMs.
