RBI Increases ATM Transaction Fee Beyond Free Withdrawal Limit
Mumbai (Economy India): Bank customers will have to pay more for ATM withdrawals beyond their free transaction limit as the Reserve Bank of India (RBI) has approved an increase in ATM withdrawal charges. Starting May 1, 2025, banks will charge ₹23 per transaction, up from the existing ₹21, once a customer has exhausted their monthly free withdrawal quota.
This move comes as part of RBI’s periodic review of banking service charges, aimed at aligning operational costs with inflation and rising ATM maintenance expenses.
Higher ATM Charges: What Customers Need to Know
Currently, banks allow a limited number of free ATM transactions per month. Beyond this limit, customers pay a fee for each withdrawal, which will now increase from ₹21 to ₹23 per transaction from May 1.
Key Changes Effective May 1, 2025:
- Increased Fee: ATM withdrawals beyond the free limit will be charged at ₹23 per transaction, up from ₹21.
- Free Transaction Limit: Customers can still enjoy 5 free ATM withdrawals per month from their own bank’s ATMs and 3 to 5 free transactions from other banks’ ATMs, depending on their location (metro/non-metro).
- Impact on Frequent Withdrawals: Those who frequently withdraw cash beyond their free limit will see an increase in overall banking expenses.
Why the Hike in ATM Charges?
The RBI reviews ATM transaction charges periodically based on operational costs. The rising expenses of ATM infrastructure, cash replenishment, security, and digital banking transformation have led to this price adjustment.
According to banking experts, this hike is meant to:
✔ Offset increasing ATM maintenance costs for banks.
✔ Encourage digital transactions and reduce dependency on cash.
✔ Ensure continued ATM availability in remote and urban locations.
How Can Customers Avoid Extra Charges?
With the increase in ATM withdrawal fees, customers can:
- Plan their cash withdrawals wisely to stay within the free limit.
- Use UPI, mobile banking, or net banking for transactions to avoid unnecessary ATM withdrawals.
- Withdraw larger amounts in fewer transactions to minimize extra charges.
The revision in ATM withdrawal charges is part of a broader shift towards digital banking and cost optimization. While bank customers will face a small additional cost, this move is expected to reduce ATM congestion and promote cashless transactions.
As digital payment methods continue to expand in India, the reliance on ATMs for cash withdrawals is gradually decreasing. However, for those who still depend on cash transactions, careful planning can help avoid unnecessary banking fees.
(Economy India)
