From May 1, 2025, withdrawing money from an ATM will become more expensive, as the Reserve Bank of India (RBI) has approved an increase in ATM charges. Whether you’re a student managing your monthly expenses or a professional keeping track of cash transactions, this change is bound to affect your daily finances.
The new rule isn’t just a minor tweak—it reflects broader shifts in how banks handle operational costs and the growing push towards digital payments. If you use an ATM more than a few times a month, here’s everything you need to know to avoid extra charges and plan your cash usage better.
ATM Fee Hike 2025
| Topic | Details |
|---|---|
| Effective Date | May 1, 2025 |
| New Financial Transaction Fee | ₹19 per transaction (after free limit) |
| Old Financial Transaction Fee | ₹17 per transaction |
| New Non-Financial Transaction Fee | ₹7 per transaction (after free limit) |
| Old Non-Financial Transaction Fee | ₹6 per transaction |
| Free Transactions in Metro Cities | 5 free from own bank, 3 from others |
| Free Transactions in Non-Metro Areas | 5 free from own bank, 5 from others |
| Who Decided This? | RBI and National Payments Corporation of India (NPCI) |
| Why the Hike? | To cover rising operational costs and support ATM network expansion |
As the RBI increases ATM fees from May 1, 2025, withdrawing cash from ATMs will cost more, especially for users exceeding their free transaction limits. While the fee hike helps banks cover growing operational expenses, it also serves as a push toward digital banking in line with India’s financial vision.
To stay ahead, track your ATM usage, embrace digital payments, and plan cash withdrawals wisely. The shift may seem small today, but it marks another step in India’s evolving banking ecosystem.
Why Is the RBI Increasing ATM Charges in 2025?
The interchange fee, which banks pay each other when you withdraw from an ATM not operated by your bank, has been increased. This is essentially the fee one bank pays another to let you use its ATM.
- The financial transaction interchange fee is now up by ₹2 (from ₹17 to ₹19).
- The non-financial transaction fee has gone up by ₹1 (from ₹6 to ₹7).
These fees will be charged to customers after exceeding their monthly free transaction limits.
The RBI and NPCI approved this hike to help banks and ATM operators cope with rising maintenance and technology upgrade costs. As cash use declines and digital transactions surge, ATM operators are facing pressure to maintain physical infrastructure with fewer users.
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What Are the Free ATM Transaction Limits?
You don’t have to pay for every ATM transaction. Banks offer free transactions each month, but limits vary depending on where you live.
Metro Cities (e.g., Mumbai, Delhi, Chennai, Kolkata, Bengaluru, Hyderabad):
- 5 free transactions per month at your own bank’s ATMs
- 3 free transactions per month at other bank ATMs
Non-Metro Cities:
- 5 free transactions per month at your own bank’s ATMs
- 5 free transactions per month at other bank ATMs
Note: These limits include both financial (cash withdrawal) and non-financial (balance check, mini statement, PIN change) transactions.
So, if you live in Delhi and check your balance twice and withdraw cash three times from an SBI ATM (your own bank), you’ve already used up your free quota.
What Will You Pay After Free ATM Limits?
Once you exceed your free limit, here’s how much you’ll be charged per transaction:
| Transaction Type | Old Fee | New Fee (From May 1, 2025) |
|---|---|---|
| Financial (e.g., withdrawal) | ₹17 | ₹19 |
| Non-Financial (e.g., balance check) | ₹6 | ₹7 |
Example: If you withdraw cash 3 times from another bank’s ATM in a metro city (free), and then withdraw a 4th time, you’ll be charged ₹19 for that extra transaction.
Why This Matters to You
This may seem like a small increase, but over time, frequent ATM users—especially small business owners, gig workers, pensioners, and students—may end up paying hundreds of rupees more each year.
Moreover, this fee hike will:
- Encourage more people to use digital payments (UPI, net banking, mobile wallets).
- Disincentivize frequent ATM withdrawals, especially from other banks.
- Affect low-income users who rely heavily on cash.
Tips to Avoid Extra ATM Charges
Here’s how you can stay within the free limit and avoid these increased charges:
1. Track Your ATM Usage
Use your banking app or SMS alerts to monitor how many free transactions you’ve used.
2. Use Your Own Bank’s ATM
Stick to your own bank’s ATMs to get the maximum free transactions.
3. Withdraw Larger Amounts Less Often
Instead of withdrawing ₹1,000 five times, withdraw ₹5,000 once.
4. Go Digital
Use UPI, debit cards, or mobile wallets for everyday payments instead of cash.
5. Know Your Bank’s Rules
Some premium accounts may offer extra free ATM withdrawals. Check with your bank.
The Bigger Picture: Digital India Push
India is rapidly shifting towards cashless transactions. According to NPCI, UPI transactions crossed 12 billion in January 2025 alone. As this shift continues, ATMs are becoming costlier to maintain.
The RBI’s goal with this fee hike is not just to recover costs but also to incentivize digital behavior, making India more financially inclusive and tech-savvy.
Who Will Be Most Affected?
- Rural users with limited ATM access may face difficulty avoiding fees.
- Senior citizens who prefer cash might need assistance transitioning to digital modes.
- Students and young professionals who use ATMs frequently due to budget limits.
Banks may eventually reduce ATM deployments, especially in low-traffic areas, which could make access harder for those not digitally connected.
see also: You Can Also Take Advantage of These 5 Great Benefits of the Bank
ATM Fee Hike FAQs
Q1. When will the new ATM charges take effect?
The revised charges start from May 1, 2025.
Q2. Will this affect balance inquiry and mini statements?
Yes. After free limits, even non-financial transactions like balance checks will be charged ₹7 per use.
Q3. How can I avoid paying extra ATM fees?
Use your bank’s ATM, track your usage, and switch to digital payments where possible.
Q4. Are senior citizens exempt from ATM fees?
There is no nationwide exemption. However, some banks offer senior citizen-friendly accounts. Check with your bank.
Q5. Does this mean ATM usage is discouraged?
Not discouraged—but the RBI aims to optimize ATM usage and encourage digital alternatives.
