The Reserve Bank of India (RBI) has announced that from today, May 1, customers will be charged up to Rs 23 for each ATM transaction beyond their free limit. This is a small increase from the previous fee of Rs 21. The change comes after the RBI allowed banks to raise fees for ATM withdrawals once the free limit is used up.

This new rule applies to all commercial banks, including regional rural banks (RRBs), cooperative banks, ATM network operators, and card payment companies.This fee change will be in effect starting from May 1, 2025.
From May 1, customers will be allowed five free transactions (financial and non-financial) per month at their own bank's ATM. 

In metro cities, customers can also make three free transactions at other banks' ATMs. In non-metro cities, customers get five free transactions at their own bank's ATM and an additional five free transactions at ATMs of other banks, according to RBI guidelines.

What happens if you go beyond free limit?

If customers go beyond their monthly free transaction limit, banks can charge up to Rs 23 per transaction. This fee applies to both financial transactions (like withdrawing or depositing money) and non-financial ones (such as checking balance or changing a PIN). The RBI has also stated that this charge applies to Cash Recycler Machines (CRMs), except when depositing cash.

The RBI notification states, "Once the free transaction limit is exceeded, a customer may be charged a maximum fee of Rs 23 per transaction, effective from May 1, 2025. Any applicable taxes will be charged in addition. These rules also apply to transactions at Cash Recycler Machines, except for cash deposit transactions."
It also stated that the ATM interchange fee will be set by the ATM network. Currently, the fee is Rs 19 for financial transactions and Rs 7 for non-financial transactions across all locations.

An ATM interchange fee is the amount one bank pays to another for allowing its customers to use the ATM. For instance, if you're an HDFC Bank customer and use an SBI ATM in Delhi to withdraw money, HDFC Bank will charge you if you make your fourth transaction at an SBI ATM during the month.