RBI increases ATM withdrawal fee to Rs 23 from May 2025

ATM interchange fee that banks pay each other, raising it to Rs 19.

In a circular, the RBI stated, “Beyond the free transactions, a customer may be charged a maximum fee of Rs 23 per transaction.” Applicable taxes will also need to be paid by the customer.

As per RBI guidelines, customers are allowed five free ATM transactions per month at their own bank's ATMs. Additionally, customers are entitled to a fixed number of free transactions at other banks' ATMs: three in metro centers and five in non-metro centers. These transactions can be either financial or non-financial.

For transactions exceeding the free limit, banks charge fees based on their respective board-approved policies. This fee is typically passed on to the customer by the card-issuing bank, while the charge is paid to the bank where the ATM transaction occurs (the acquirer).

RBI recently approved a Rs 2 increase in the ATM interchange fee for cash withdrawals. On March 6, 2024, the National Financial Switch Steering Committee approved raising the ATM interchange fee for domestic financial transactions to Rs 19 and non-financial transactions to Rs 7. Subsequently, the National Payments Corporation of India (NPCI) sought the RBI’s approval to implement these changes. The revised fee will also be subject to Goods and Services Tax (GST), which will be added separately.

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According to RBI data, as of January 2025, India had 2,16,706 ATMs. However, the volume of ATM transactions has been on a steady decline. While over 57 crore cash withdrawal