New Delhi: Starting May 2025, withdrawing cash from ATMs will cost a little more. The Reserve Bank of India (RBI) has given banks the green light to increase ATM withdrawal charges to ₹23 per transaction once you cross your free monthly limit. And yes, taxes will be extra.
Free transactions still exist:
Don’t worry, you still get a few free ATM transactions every month. Here’s how it works:
· You get 5 free transactions per month at your own bank’s ATMs.
· At other banks’ ATMs, you get 3 free transactions in metro cities and 5 in non-metro areas (this includes both cash withdrawals and balance checks).
What happens after you use up your freebies?
Once you go beyond your free limit, banks will start charging a fee per withdrawal. The fee varies by bank, but in general, the bank that issued your ATM card will charge you, and the money goes to the bank where you used the ATM.
Why the Hike?
This increase is happening because the RBI has allowed a ₹2 hike in ATM interchange fees—the cost banks pay each other when customers use an ATM that isn’t from their own bank. The new fees are ₹19 for cash withdrawals and ₹7 for non-financial transactions like checking your balance. These charges will also attract GST.
Are people using ATMs less?
Interestingly, ATM withdrawals in India have been going down over time:
· January 2023: 57 crore transactions
· January 2024: 52.72 crore transactions
· January 2025: 48.83 crore transactions
Even so, cash remains a big part of the Indian economy.
The last time ATM fees increased in 2021, the number of ATMs actually increased! In 2023-24, ATM cash withdrawals through monthly ATMs rose by 5.51%, reaching ₹1.43 crore on average.
So, while digital payments are on the rise, cash is still king for many, keep an eye on your transactions to avoid extra charges.
