The Reserve Bank of India (RBI) has declared that, following free monthly transactions, ATM withdrawal fees will be Rs 23 per transaction for ATM baking services. According to the Central Bank, the increased fees will take effect on May 1, 2025.
Consumers will still be able to use their own bank’s ATMs to make five free transactions each month. Both financial and non-financial transactions are included in these transactions.
They can also use the ATMs of other banks to conduct free transactions. In this instance, there are three free transactions in metro areas and five in non-metropolitan areas.
An increase in ATM interchange fees was previously approved by the RBI. The Central Bank reportedly decided to increase the fee by Rs. 1 for non-financial transactions and Rs. 2 for financial transactions. On May 1, the increased fees will go into effect.
What is an ATM interchange fee?
In the financial services sector, nothing is free. A fee must be paid to the other bank each time a customer of one bank uses an ATM of another bank for any kind of transaction, whether it be financial or not. This price is known as an ATM interchange fee, and it is typically a set amount every transaction.
What will the new fee be?
The new fee after this hike will be as follows:
- For financial transactions i.e. cash withdrawal: It will be increased from Rs 17 to Rs 19 per transaction.
- For non-financial transactions i.e. balance inquiries and other such things: It will be raised to Rs 7 per transaction from the existing Rs 6.
Will this move impact customers?
This fee is frequently passed on to clients by the bank as part of their overall banking expenses. Whether or whether this charge increase will be passed on to customers is still up in the air.
The increase is a component of a revision that the RBI authorized, which was based on a National Payments Corporation of India (NPCI) recommendation.
