ATM withdrawals to cost Rs 23 from May 1 as RBI hikes fee. Check details

The Reserve Bank of India (RBI) has announced an increase in fees for ATM withdrawals.

Which will take effect from May 1, 2025. Customers will now have to pay Rs 23 per transaction after exhausting their free monthly limit. This is an increase from the current charge of Rs 21 per transaction.

Despite the fee hike, customers will continue to receive a limited number of free ATM transactions every month. According to the RBI guidelines, bank account holders will get:

Five free transactions per month (both financial and non-financial) at ATMs of their own bank.

Three free transactions per month at ATMs of other banks in metro cities.

Five free transactions per month at ATMs of other banks in non-metro areas.

Once customers exceed these limits, they will have to pay Rs 23 per withdrawal.

WHY HAS RBI INCREASED ATM FEES?
The RBI has justified the hike, stating that it is necessary to cover the rising operational costs of maintaining ATMs. The central bank last revised ATM withdrawal fees in 2021, increasing the charge from Rs 20 to Rs 21.

Banks incur expenses for cash management, ATM maintenance, and security. The increase in fees aims to help banks recover some of these costs.

For frequent ATM users, the fee hike means they will need to plan their withdrawals more carefully to avoid extra charges. Many banks encourage customers to use digital banking options such as UPI, internet banking, and mobile wallets to reduce dependency on cash withdrawals.

Government data suggests that the State Bank of India (SBI) earns a significant amount from ATM withdrawal charges. On the other hand, several public sector banks (PSBs) have been struggling financially, partly due to the costs of maintaining ATM services.