The Reserve Bank of India (RBI) has approved an increase in ATM withdrawal charges, which will come into effect from May 1, 2025. This change follows a proposal by the National Payments Corporation of India (NPCI) and will result in higher fees for customers withdrawing cash from ATMs, especially from machines outside their home bank network.
Increased Charges for ATM Transactions
1. Higher Charges for Non-Home Bank ATMs
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Customers using an ATM outside their home bank’s network will now have to pay higher transaction fees.
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Currently, withdrawing money from a non-home bank ATM incurs a charge of ₹17 per transaction, but from May 1, this will increase to ₹19.
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Similarly, balance inquiries at non-home bank ATMs, which currently cost ₹6 per inquiry, will now cost ₹7.
2. Free Transaction Limits Remain Unchanged
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Customers can still avail a limited number of free transactions per month before these charges apply.
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Metro cities: Customers can make five free transactions per month at non-home bank ATMs.
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Non-metro cities: The limit remains three free transactions per month.
Reason Behind the Fee Hike
1. Increasing Operational Costs
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The White Label ATM Operators have been demanding an increase in fees, citing rising costs of maintenance, security, and cash management.
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Banks also face additional expenses related to ATM infrastructure and security measures.
2. Impact on Small Banks
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Smaller banks with limited ATM networks heavily rely on other banks’ ATMs for cash withdrawals by their customers.
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The increased interchange fees (fees paid by a bank when its customer uses another bank’s ATM) may put additional financial pressure on these institutions.
Conclusion
Customers who frequently withdraw cash from ATMs should take note of these changes and plan their transactions accordingly. The increased charges will apply only after the free transaction limit is exceeded. This move is expected to help banks and ATM operators manage the rising operational costs while ensuring continued ATM availability across the country.
For further updates on banking policies, stay tuned!
