In a move that affects millions of banking customers across India, the Reserve Bank of India (RBI) has announced a revised fee structure for Automated Teller Machine (ATM) transactions, effective from May 1, 2025. Under the new guidelines, banks are now permitted to levy a maximum fee of Rs 23 per ATM transaction, a modest increase from the earlier cap of Rs 21. This decision comes as part of the RBI’s broader efforts to enhance the efficiency and cost recovery of ATM infrastructure while ensuring transparency in customer charges.
Revised Transaction Charges
Previously, customers who exceeded the free ATM transaction limits were charged a maximum of Rs 21 per transaction. With the new policy, this has been raised to Rs 23 per transaction. The change applies to both financial (such as cash withdrawals) and non-financial transactions (such as balance inquiries or mini statements) carried out at ATMs and Cash Recycler Machines (CRMs), with the exception of cash deposits.
This revision aims to balance the rising costs of operating and maintaining ATM infrastructure with customer convenience. It also reflects the growing dependence on digital and card-based transactions, even as ATMs remain essential for a large section of the population, particularly in semi-urban and rural areas.
Free Transaction Limits
The RBI has also reiterated the number of free ATM transactions allowed for customers each month:
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For metro cities:
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5 free transactions at own bank’s ATMs
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3 free transactions at other banks’ ATMs
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For non-metro cities:
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5 free transactions at own bank’s ATMs
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5 free transactions at other banks’ ATMs
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These free transactions include both financial and non-financial services. Once the customer crosses the permissible free transaction limit, banks can charge up to Rs 23 for each additional transaction, irrespective of whether it’s a cash withdrawal or a balance check.
This uniform structure aims to reduce discrepancies between banks and geographical regions, giving customers a clearer understanding of their entitlements and the potential charges they may face.
Interchange Fee and Its Implications
Alongside the customer transaction charges, the ATM interchange fee—the fee that one bank pays another for allowing its customer to use the other bank’s ATM—also plays a vital role in this ecosystem. The RBI clarified that the interchange fee will continue to be determined by the ATM network operators.
As of now, the interchange fees stand at:
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Rs 19 per financial transaction
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Rs 7 per non-financial transaction
These rates are applicable across metro and non-metro locations. The structure ensures that the operating bank gets compensated for the cost of providing services to a customer from another bank. It is also a key incentive for banks to expand and maintain their ATM networks, especially in less profitable or remote locations.
Why the Change?
The revision in charges stems from various operational, infrastructural, and inflation-related considerations. Over the years, the cost of maintaining ATMs—including expenses for cash management, security, electricity, and compliance with technological upgrades—has steadily risen. Banks and ATM operators have requested a hike in fees to match these increasing costs.
The RBI’s decision follows consultations with stakeholders and reviews conducted by expert committees. It strikes a balance between customer protection and the need to ensure the sustainability of ATM operations across the country.
What Customers Should Do
With the updated fee structure now in effect, customers are encouraged to:
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Monitor their monthly ATM usage to stay within the free transaction limits.
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Use digital banking services like UPI, net banking, or mobile apps wherever feasible to avoid ATM charges.
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Plan withdrawals better to minimize the number of ATM visits.
While Rs 23 may seem like a small amount, frequent excess transactions can add up over time, especially for individuals who rely heavily on cash.
Final Thoughts
The RBI’s new fee structure for ATM transactions introduces a slight increase in transaction costs but seeks to standardize and simplify how banks charge their customers. The move also reflects ongoing changes in consumer behavior and banking infrastructure, emphasizing the need for efficient and sustainable ATM services.
As digital payments continue to rise, the RBI’s latest policy ensures that physical banking access points like ATMs remain viable and well-maintained, while also safeguarding consumer interests through transparent and regulated charges.
