Mumbai: The Reserve Bank of India on Friday permitted banks to increase charges on ATM cash withdrawals beyond the mandatory free monthly usage by Rs 2 to Rs 23 per transaction from May 1.
Customers are eligible for five free transactions (inclusive of financial and non- financial transactions) every month from their own bank Automated Teller Machines (ATMs).
They are also eligible for free transactions (inclusive of financial and non-financial transactions) from other bank ATMs — three transactions in metro centres and five in non-metro centres.
“Beyond the free transactions, a customer may be charged a maximum fee of Rs 23 per transaction. This shall be effective from May 1, 2025,” the RBI said in a circular.
Currently, banks are allowed to charge Rs 21 per transaction, after a customer exhausts the free transaction limit.
The RBI further said the instructions shall also apply, mutatis mutandis, to transactions done at cash recycler machines (other than for cash deposit transactions).
The Reserve Bank of India (RBI) had, from time to time, issued various instructions on the number of free ATM transactions and maximum charges that can be levied on a customer beyond the mandatory free transactions. Instructions have also been issued by the RBI on interchange fee structure for ATM transactions.
The circular also said the ATM interchange fee will be as decided by the ATM network.
The current interchange fee per transaction is Rs 17 for financial transactions and Rs 6 for non-financial transactions in all centres.
Commenting on the proposed charges, Shikhar Aggarwal, Chairman, BLS E-Services, 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 is applicable to all commercial banks, including RRBs, co-operative banks, authorised ATM network operators, card payment network operators, and white label ATM operators.
There were 1,30,902 on-site ATMs and cash recycler machines (CRMs) and 85,804 off-site at end-January 2025.–(PTI)
