ATM charges from May 1: The Reserve Bank of India (RBI) on Friday, March 28, permitted banks to increase charges on ATM cash withdrawals beyond the free monthly usage by ₹2 to ₹23 per transaction from May 1, 2025.
Customers are eligible for five free monthly transactions (including financial and non-financial) from their state-run or private bank’s Automated Teller Machines (ATMs). According to RBI, they are eligible for free transactions (including financial and non-financial) from other bank ATMs—three transactions in metro centres and five in non-metro centres.
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ATM charges from May 1: What are the key changes?
“Beyond the free transactions, a customer may be charged a maximum fee of ₹23 per transaction. This shall be effective from May 1, 2025,” the RBI said in a circular. Currently, banks can charge ₹21 per transaction after a customer exhausts the free transaction limit. The RBI further said the instructions will also apply mutatis mutandis to transactions done at cash recycler machines (other than for cash deposit transactions).
The RBI has issued various instructions on the number of free ATM transactions and the maximum charges that can be levied on a customer beyond the mandatory free transactions from time to time. The RBI has also issued instructions on the interchange fee structure for ATM transactions.
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The circular also said the ATM network will decide the ATM interchange fee. According to the circular, the current interchange fee is ₹17 for financial transactions and ₹6 for non-financial transactions in all centres.
Commenting on the proposed charges, Shikhar Aggarwal, Chairman of BLS E-Services, told news agency PTI that the RBI’s decision to increase ATM interchange fees underscores the growing cost of cash transactions in India.
“While this hike may burden frequent ATM users, it presents a significant opportunity for business correspondents (BCs) and digital-first players. With ATM withdrawals becoming costlier, customers — especially in rural and semi-urban areas — will increasingly turn to MicroATMs and BC networks, which remain fee-free for transactions,” he said.
The RBI’s circular applies to all commercial banks, including regional rural banks, cooperative banks, authorised ATM network operators, card payment network operators, and white-label ATM operators. At the end of January 2025, there were 1,30,902 on-site ATMs and cash recycler machines (CRMs) and 85,804 off-site.
Credit card benefits
Major banks, including SBI and IDFC First Bank, are altering their co-branded Vistara credit cards. Benefits like ticket vouchers, renewal perks, and milestone rewards will be discontinued. Axis Bank will implement similar changes starting April 18, affecting its Vistara credit cardholders.
What is an ATM interchange fees?
A bank charges this fee for providing ATM services to another bank. This fee, usually a fixed amount per transaction, is often passed on to customers as part of their banking costs. The increase in charges will apply nationwide and is expected to impact customers, particularly those from smaller banks.