Starting May 1, 2025, ATM withdrawal charges will increase by Rs 2 for transactions exceeding the free monthly limit, as announced by the Reserve Bank of India (RBI). The new charges for ATM banking services will now stand at Rs 23 per transaction, up from the earlier charge of Rs 21. The central bank has also clarified that the new fee structure will apply to transactions made after the free transaction limit has been reached.

Under the current structure, customers are entitled to five free transactions per month at their own bank’s ATMs, which include both financial and non-financial transactions, such as cash withdrawals and balance inquiries. For transactions at other banks’ ATMs, customers can make three free transactions per month in metro cities and five in non-metro areas. Once this free transaction limit is exceeded, the new charges will apply. The changes are a part of a broader move to revise ATM interchange fees, which are charges paid by banks when their customers use ATMs of other banks.

In addition to the increase in ATM withdrawal charges, the RBI has approved an increase in ATM interchange fees. The fees for financial transactions, such as cash withdrawals, will increase from Rs 17 to Rs 19 per transaction, while non-financial transactions, including balance inquiries, will now incur a fee of Rs 7 per transaction, up from the current Rs 6. This adjustment is part of a proposal from the National Payments Corporation of India (NPCI), which was approved by the RBI.

The introduction of the new charges has raised questions about the potential impact on customers. Banks typically pass on such charges to their customers as part of the cost of using ATM services. However, it remains unclear whether this fee hike will be directly transferred to customers or if the banks will absorb the increased charges. If passed on to customers, users who exceed the free transaction limit will notice higher costs for ATM withdrawals and other banking services.

The revision in fees follows the growing demand for banks to cover the operational costs of maintaining ATMs and the infrastructure needed for ATM networks. While these fees are intended to ensure that banks can maintain and enhance ATM services, customers, particularly those who frequently use ATMs outside their bank’s network, could face higher banking costs.

In conclusion, the new charges, set to be implemented in May 2025, are a significant change for ATM users. While the increased fees are aimed at maintaining the ATM infrastructure, customers are advised to be mindful of their free transaction limits to avoid extra charges. The full impact of these changes will become clearer once banks decide whether to pass on the fee hikes to their customers.

India TV.