Starting May 1, 2025, withdrawing cash from ATMs beyond the free transaction limit will become more expensive. The Reserve Bank of India (RBI) and the National Payments Corporation of India (NPCI) have jointly decided to increase the ATM withdrawal fee by ₹2 per transaction, raising it from ₹21 to ₹23 per transaction.
Why is the ATM Withdrawal Fee Increasing?
The decision to hike ATM charges is driven by the rising operational costs of maintaining ATMs. Banks incur expenses related to cash handling, security, and technology upgrades, which contribute to the need for a fee revision.
New ATM Withdrawal Charges – Key Changes
- Effective Date: May 1, 2025
- Current Fee (Beyond Free Limit): ₹21 per transaction
- New Fee: ₹23 per transaction
- Regulatory Authorities: RBI & NPCI
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How Many Free ATM Withdrawals Are Allowed?
Customers can withdraw cash without any charges up to a certain limit each month. Beyond this limit, banks impose an interchange fee. The number of free transactions varies based on location:
- Metropolitan Cities (Mumbai, Delhi, Kolkata, Chennai, Hyderabad, Bangalore): 3 free withdrawals per month
- Non-Metro Locations: 5 free withdrawals per month
Once the free limit is exceeded, a fee will be deducted from the account for each additional transaction.
What is an ATM Interchange Fee?
The interchange fee is the amount that one bank pays to another when a customer uses an ATM that does not belong to their home bank. This fee is charged to customers when they exceed their bank’s designated free transaction limit.
How to Avoid Extra ATM Charges?
- Use digital banking apps for UPI and online transfers to reduce cash dependency.
- Withdraw larger amounts at once to minimize the number of transactions.
- Check your bank’s free transaction limit to plan your withdrawals effectively.
Final Thoughts – Plan Your Withdrawals Wisely!
Withdrawing cash from ATMs will cost more from May 2025, so it’s important to be mindful of your transaction limits. Consider using digital payment methods or planning withdrawals strategically to avoid extra fees.
What do you think about this fee hike? Share your thoughts in the comments!
