RBI to hike ATM transaction fees wef 1 May 2025
Reserve Bank of India (RBI) on Friday announced to increase ATM withdrawal fees. According to the notification, from May 1, customers will have to pay an additional Rs 2 for every transaction on exceeding the monthly free transaction limit.
Currently, banks charge Rs 21 for exceeding the free transaction limit. Now they will charge Rs 23. Earlier, RBI had also announced to increase ATM interchange fees. RBI has also increased the interchange fee by Rs 2. That is, now Rs 19 interchange charge will have to be paid on every transaction, which was Rs 17 earlier.
The fee for non-financial transactions such as balance inquiry has been increased by Rs 1. That is, Rs 7 will be charged on every transaction for checking account balance, which was Rs 6 earlier.
How many free transactions can be done from ATM Customers are allowed a limited number of free transactions every month on ATMs of different banks. Customers are allowed 5 transactions in metro cities, while 3 transactions are allowed in non-metro cities. If the number of free transactions is exceeded, customers have to pay additional charges.
What is ATM interchange fee?
ATM interchange fee is a charge that one bank pays to another bank for providing ATM services. This fee is usually a fixed amount charged on every transaction, which is often added to the customers as part of their banking cost.
RBI took this decision after the request of ATM operators
RBI decided to revise these charges after the request of white-label ATM operators. ATM operators had argued that rising operational expenses were affecting their business.
The increase in ATM charges will be applicable across the country. This may affect the customers of small banks. These banks depend on large financial institutions for ATM infrastructure and related services. This is the reason why the impact of rising costs is more on such banks.
