ATM Charges Hike 2025: All ATM users need to sit tight. The cash withdrawal users will now face higher fees effective May 1, 2025, because the Reserve Bank of India (RBI) approved an increase of ATM transaction charges that will make cash withdrawal transactions costlier beyond a free limit.
This will affect millions of bank customers, especially those using ATMs to meet their daily cash needs: but What caused the charges to rise? Who will be heavily affected? And how does one avoid incurring extra costs? Let’s break it down.
RBI has increased the New ATM Charges
From the date of the change, May 1, 2025, the fees attached to ATM withdrawal will increase from ₹21 to ₹23 with each transaction above the free limit. The increase does not seem large for an individual ATM transaction but will prick pretty hard over time for the frequent user.
Free ATM Transactions will continue to Prevail.
- ATMs of your own bank: 5 free transactions per month (this will not change). ATMs of other Banks:
- Metro cities: 3 free transactions in a month.
- Non-metro cities: 5 free transactions in a month.
After this limit is breached, the new fee of ₹23 applies for each transaction.
Who will be Affected Most?
- Frequent Cash Users – You tend to visit ATMs often for cash withdrawal, hence your costs are going to increase.
- Customers of Smaller Banks – Most of the time, smaller banks have fewer ATMs, thus compels customers to go for other banks’ ATMs and incur additional charges.
- People in Metro Cities – The metro folk fetch only 3 free transactions at other banks’ ATMs; hence, they end up paying larger costs.
Why Did RBI Increase ATM Charges?
Department of Banking Regulation, Reserve Bank of India. For long, banks and third-party ATM operators (which are white-label ATMs) have been raising the argument that it had become commercially impossible to sustain the increasing operation costs.
First and foremost, the increase is based on the recommendations gotten from the National Payments Corporation of India, which was subsequently approved by the Reserve Bank of India for ensuring sustainability in ATMs.
How will you do that?
- Stick to Your Bank’s ATMs– Avoid extra charges by using your own bank’s machines.
- Use Digital Means– Avoid cash dependency through using UPI, mobile wallets, or cards for payments.
- Plan with Drawals– Rather than withdrawing many times in small amounts, withdraw large amounts once.
- Consider Switching Banks– Move to a bank with a larger network if your bank does not have many ATMs-in all likelihood, this would help.