ATM Withdrawals to Get Costlier from May 1 as RBI Approves Fee Hike

Starting May 1, 2025, withdrawing cash from ATMs in India will become more expensive as the Reserve Bank of India (RBI) has approved an increase in interchange fees. The interchange fee, which is charged when a customer uses an ATM of a bank other than their own, will rise, leading to higher costs for customers exceeding their free transaction limits. The RBI’s decision comes in response to requests from white-label ATM operators, who cited rising operational expenses. The fee hike is expected to impact customers, especially those from smaller banks, as they rely on larger financial institutions for ATM infrastructure.

Key Highlights

• Effective Date: May 1, 2025.
• Reason for Fee Hike: Rising operational costs of white-label ATM operators.

Impact on Customers

• Additional ₹2 per financial transaction beyond the free limit.
• Additional ₹1 per non-financial transaction (e.g., balance inquiry).

Revised ATM Charges

• Cash Withdrawal: ₹19 per transaction (previously ₹17).
• Balance Inquiry: ₹7 per transaction (previously ₹6).

Digital Payment Growth

• UPI and online transactions have significantly reduced ATM usage.
• Government data shows digital payments surged from ₹952 lakh crore (FY14) to ₹3,658 lakh crore (FY23).

Possible Impact

• Customers relying on cash transactions may find this burdensome.
• Increased shift towards digital transactions is expected.