ATM withdrawals to get costlier starting May 1: Here's why
What's the story
The Reserve Bank of India (RBI) has approved a hike in ATM interchange fees, effective May 1, 2025.
The change will make cash withdrawals and balance inquiries at ATMs outside one's home bank network costlier for customers.
The move follows a proposal from the National Payments Corporation of India (NPCI) and is aimed at tackling rising operational costs of white-label ATM operators.
White-label ATM operators are non-banking entities authorized by RBI to manage and operate ATMs.
Fee details
Revised charges and their applicability
The revised charges for ATM transactions include an increase in cash withdrawal fee from ₹17 to ₹19 per transaction and a hike in balance inquiry fee from ₹6 to ₹7 per transaction.
These new charges will be applicable once customers cross their free monthly limits of five transactions in metro cities and three in non-metro areas.
Fee implications
Impact on customers and smaller banks
The hiked interchange fee is likely to affect customers who often use ATMs beyond their home bank network.
Smaller banks, which rely more on other banks' ATM networks, may take a bigger hit of these costs.
This could even result in higher maintenance charges for bank customers.
However, frequent ATM users can save themselves from these extra charges by using their home bank's ATMs or going for digital payments instead.