Mumbai: Starting May 1, 2025, bank customers will face higher fees for withdrawing money from ATMs. The Reserve Bank of India (RBI) has approved an increase in the ATM interchange fee, which will impact both financial and non-financial transactions.
The fee for financial transactions, such as cash withdrawals, will rise by Rs 2, from Rs 17 to Rs 19. Additionally, non-financial transactions like balance inquiries will now cost Rs 7, an increase of Rs 1 from the previous fee of Rs 6.
Free Withdrawal Limits
Customers are allowed a certain number of free transactions at ATMs each month. In metro areas, individuals can make up to 5 free withdrawals, while in non-metro areas, the limit is 3 transactions. Once the free transaction limit is exceeded, customers will be charged the new, higher interchange fee for additional withdrawals.
What is an Interchange Fee?
The interchange fee is the charge one bank pays to another when a customer uses an ATM that is not linked to their home bank. This fee covers the costs associated with the bank that operates the ATM for providing services to a customer from a different bank. The last update to ATM fees occurred in June 2021.
Tips to Avoid Higher Charges
To avoid paying higher fees, customers are advised to:
- Use their own bank’s ATMs to stay within the free transaction limit.
- Keep track of ATM withdrawals to avoid exceeding the free transaction limit.
- Use digital banking and online payment methods to reduce reliance on cash withdrawals.
This revision is aimed at streamlining the ATM services and addressing the cost dynamics between banks.
