From May 1, 2025, taking out cash from ATMs will become more expensive. The Reserve Bank of India (RBI) has allowed banks to increase ATM interchange fees. This fee is what one bank pays another when you use an ATM that doesn’t belong to your bank. It helps cover the cost of running the ATM and offering services to customers from different banks.

New charges for ATM transactions

Here’s a breakdown of the new charges:

  • Cash withdrawal fee: Rs 17 to Rs 19 per transaction
  • Balance inquiry fee: Rs 6 to Rs 7 per transaction
  • Effective date: May 1, 2025

The cost of financial transactions, like cash withdrawals, will go up by Rs 2. Non-financial transactions, like balance inquiries, will rise by Rs 1.

This hike follows a recommendation from the National Payments Corporation of India (NPCI). White-label ATM operators (who run ATMs not linked to any specific bank) pushed for this increase, saying that the old fees weren’t enough to cover rising operational costs.

Although the RBI has approved the hike, it hasn’t yet issued an official notice. However, the new fees are expected to become the standard soon, according to Business Today.

How this affects you

The fee hike will mainly impact smaller banks. These banks have fewer ATMs, which means their customers often use ATMs from larger banks—leading to more interchange fees.

For regular ATM users, this means higher costs once they exceed their free monthly transactions. Customers usually get three free transactions at non-metropolitan ATMs and five free transactions at ATMs in metro cities. After that, the new charges will apply.

Many people may now consider using digital payments more often or sticking to their own bank’s ATMs to avoid extra costs.

The last time ATM fees were raised was back in June 2021. This new increase could make cash withdrawals a bit more expensive, encouraging a shift to online banking and cashless payments.

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