If you frequently withdraw cash from ATMs, get ready to pay higher charges. Starting May 1, 2025, withdrawing money beyond the free transaction limit set by the Reserve Bank of India (RBI) will cost you more. Currently, banks charge ₹21 per transaction after exceeding the free withdrawal limit. However, this fee is set to increase by ₹2, meaning customers will now have to pay ₹23 per extra transaction.

RBI Approves Hike in ATM Charges

On Friday, March 28, the Reserve Bank of India (RBI) officially approved the revised ATM withdrawal charges. As per RBI guidelines, bank customers are entitled to five free transactions per month from their own bank’s ATMs. Once this limit is exceeded, every subsequent withdrawal will attract a charge.

ATM Withdrawal Rules Vary by City

ATM withdrawal policies differ based on location. If you withdraw cash from another bank’s ATM in a metro city, you can only make three free withdrawals per month. In non-metro cities, this limit extends to five free withdrawals. Once these limits are crossed, every additional withdrawal will now cost ₹23 per transaction.

Until now, customers paid ₹21 for exceeding the free transaction limit. The upcoming change will impact individuals who rely on ATMs for frequent cash withdrawals.

Understanding ATM Interchange Fees

ATMs are available across cities and villages, but banks incur operational costs to maintain these machines. To recover these costs, banks charge customers for transactions. When a customer uses an ATM of another bank, their bank pays a fee to the other bank for providing the service. This fee is known as the ATM Interchange Fee, which is why withdrawal limits differ between own-bank and other-bank ATMs.

With the new fee structure coming into effect, customers who exceed their free ATM transaction limit should prepare for higher costs. This move aims to encourage digital transactions while covering the operational expenses of ATM services.

4o