ATM Withdrawal Charges Hiked from May 1, 2025: What You Need to Know

Starting May 1, 2025, customers across India will face higher ATM transaction fees as the Reserve Bank of India’s (RBI) revised withdrawal charges come into effect. Frequent ATM users will now pay ₹23 per transaction after exhausting their free monthly limit—a ₹2 increase from the previous fee of ₹21.

This revision, introduced to account for rising costs in ATM maintenance and interbank services, follows recommendations made by the National Payments Corporation of India (NPCI). It is expected to impact a wide range of users, particularly those who frequently withdraw cash beyond their allowed limit.

💳 What Are the New ATM Charges?

Under the updated rules:

• After using the free monthly quota, customers will now be charged ₹23 per ATM transaction.
• This fee applies to all banks and all savings account holders once the free transaction count is crossed.

🆓 Free Transaction Limits Remain the Same
There are no changes to the number of free ATM transactions allowed each month. Customers can continue to withdraw cash or check balances without incurring a charge as per the existing limits:

• 5 free transactions at ATMs of their own bank
• 3 free transactions per month at other-bank ATMs in metro cities
• 5 free transactions at other-bank ATMs in non-metro areas

These limits apply uniformly to savings accounts across all scheduled commercial banks.

🏦 Impact on Smaller Banks and Customers
The RBI’s decision to revise the charges is partly driven by growing operational costs and the need to support the viability of white-label ATMs and smaller financial institutions. However, the move is likely to have a greater impact on smaller banks, which often have fewer ATMs of their own and rely on the infrastructure of larger banks to serve their customers.

As a result, customers of smaller banks may find themselves hitting the free limit more frequently, leading to increased out-of-pocket expenses for basic services like cash withdrawal and balance inquiry when using out-of-network ATMs.

📝 Background: Why the Charges Were Updated
This fee hike marks the first change in ATM withdrawal charges since 2022, when the ₹21 post-limit fee was introduced. The latest increase reflects inflationary pressures and the cost of offering ATM services, including security, hardware upkeep, and interoperability across banks.

With these changes in place, ATM usage strategies may need to evolve, especially for those who make frequent cash withdrawals. Customers are advised to monitor their transactions carefully to avoid unnecessary charges.