Banks Charging More For ATM Usage Since May 1

Mumbai: If you often withdraw cash from ATMs, this update is important for you. Starting May 1, 2025, using ATMs has become more expensive. The Reserve Bank of India (RBI) has raised the charges for ATM usage. After using up your free transaction limit, you will have to pay higher fees for cash withdrawals and balance checks. Now, withdrawing cash from an ATM will cost Rs19, which was earlier Rs17. Checking your account balance will cost Rs7, up from Rs6 earlier. These new charges apply only after your free monthly limit is used.

Talking to Bizz Buzz, M Narendra, former CMD of Indian Overseas Bank, says: “The usage of ATM has been declining especially when most of the customers are using digital payment for most of their requirements. Moreover with the Central Bank Digital currency through Wallet for Retail, the requirement for ATM withdrawal may also come down further in future.” With interest rates declining, most of the banks have not only resorted to reducing interest rates on term deposits, but also on Savings Deposits where the current interest rates are itself low and further reduction in SB interest rates may be dampener for Savings Bank deposit holders maintaining fairly good average balance, he said. In the fear of margins getting reduced these steps may not help the banks in the period of low deposit growth, he said. Moreover, he went on, increasing service charges again to make up spread may also be not attractive for customers

However, banks have to follow RBI guidelines in enhancing the charges towards ATMs. It is Ideal these charges are to be changed depending upon individual banks efficiency of operations, Narendra added.

In metro cities, you can make 5 free ATM transactions every month. In non-metro cities, this limit is 3 free transactions per month. After crossing these limits, you will be charged for each ATM usage. There are several other banking changes which are planned to be imposed. Major banks like SBI, PNB, and Canara Bank are updating their minimum balance rules. Different minimum balance amounts will apply for cities, towns, and villages. If your balance is lower than the required amount, you may have to pay a penalty. SBI and IDFC First Bank are cutting back on benefits for their Vistara credit cards. Ticket vouchers, renewal bonuses, and milestone rewards may be removed. Axis Bank has also made similar changes from April 18.

Shiva Kumar, former MD and CEO of State Bank of Bikaner & Jaipur, says: “With greater use of technology for making payments and to discourage cash transactions, this small increase after one has utilized free transactions allowed every month, seems to be both, a move in right direction and without adding much cost to the customers. Cost for Banks is also increasing which needs to be offset. When you use another bank’s ATM, your bank pays a fixed interchange fee to that bank. RBI has now increased this fee. This raises costs for banks, and they might pass these extra costs on to customers. Small banks that depend on big banks’ ATMs, may now charge more to their customers. This will increase the financial burden on customers of small banks. Frequent ATM use will now lead to higher charges. So, try using UPI, net banking, or digital payments more often. This will help you avoid fees and make transactions easier.