The Reserve Bank of India (RBI) has announced that starting May 1, the fee for ATM withdrawals beyond the free monthly limit will increase by Rs 2. This means that customers will now be charged up to Rs 23 for each transaction that exceeds the free limit, marking an upward adjustment in ATM withdrawal fees. Previously, the fee was set at Rs 21 per transaction.
The central bank has clarified that customers will still be allowed five free transactions (both financial and non-financial) per month at their own bank’s ATMs. Additionally, they can make free transactions at other banks' ATMs—three in metro cities and five in non-metro areas.
According to a The Economic Times report released on Wednesday RBI and the National Payments Corporation of India (NPCI) have approved a Rs 2 increase in the ATM interchange fee for cash withdrawals. NPCI informed member banks of this change on March 13, with the revised fees scheduled to come into effect from May 1, 2025.
Previous Hikes
On March 6, 2024, the National Financial Switch Steering Committee approved an increase in the ATM interchange fee, setting the fee for domestic financial transactions at Rs 19 and for non-financial transactions at Rs 7. Following this approval, NPCI sought the RBI’s consent to implement the changes. The revised fees will be subject to Goods and Services Tax (GST), which will be applied separately.
In a letter dated March 11, the RBI informed NPCI that the ATM network itself would determine the interchange fee. NPCI subsequently notified the RBI of the implementation date for the revised fees, as confirmed in the letter shared with member banks, which was seen by the publication.
Previously, on June 13, 2024, ET reported that the association representing ATM operators had put forward a proposal to increase the interchange fee to Rs 23. The suggestion was made in an effort to enhance the profitability of the ATM business, as the current fee structure was deemed insufficient to sustain operations and maintain profitability.
