Starting May 1, 2025, withdrawing cash from Automated Teller Machines (ATM) in India will become more expensive. The Reserve Bank of India (RBI) has approved an increase in ATM interchange fees, leading to higher charges for customers exceeding their free transaction limits.
Understanding ATM Interchange Fees
An ATM interchange fee is the fee that one bank pays another when a customer withdraws money from an ATM that is not their home bank. The fees pay the ATM-owning bank for the service rendered to the non-customer. Banks tend to pass these expenses on to their customers, particularly when transactions are over the free limits allowed.
New Fee Structure
As of May 1, 2025, the new charges are as follows:
- Cash Withdrawal Fee: Revised from ₹17 to ₹19 per transaction.
- Balance Inquiry Fee: Increased from ₹6 to ₹7 per transaction.
The above changes shall be effective only after customers go beyond their complimentary monthly transaction ceilings.


Free Transaction Limits
The bank customers can avail a prescribed number of transactions free of charge every month:
- Own Bank ATMs: Five free transactions (both financial as well as non-financial) across the country.
- Other Bank ATMs: Three free transactions in urban places and five free transactions in non-metro places.
Apart from these zero-cost transactions, the new fees will apply.
Rationale Behind the Fee Hike
The hike in fees is based on suggestions by the National Payments Corporation of India (NPCI) and approval by the RBI. White-label ATM operators have been pushing for increased fees, arguing that rising operational costs render the earlier fee model unsustainable.
Impact on Consumers
This fee adjustment is expected to touch customers who use ATMs on a regular basis, especially those who use machines belonging to banks other than their own. Small banks, having a limited network of ATMs, can expect a more significant impact on their customers, as they usually rely on the ATMs of other banks for making withdrawals.
Strategies to Circumvent Further Charges
In order to contain the effect of these raised fees, customers can follow the following strategies:
- Make Smart Use of Free Transactions: Carefully monitor the number of free transactions per month and schedule withdrawals accordingly.
- Make Use of Home Bank ATMs: Try to use ATMs of your own bank wherever possible to avail of the larger number of free transactions.
- Go Digital with Payments: Use digital payment systems like UPI, mobile wallets, and online banking to minimize cash withdrawals.
- Withdraw Larger Amounts Less Frequently: Instead of many small withdrawals, try withdrawing larger sums less often to remain under free transaction limits.
The forthcoming hike in ATM withdrawal and balance inquiry charges highlights the need for smart financial planning. With awareness of the new fee regime and smart management of ATM use, customers are able to avoid extra expenses and adjust to the changing banking scenario.