ATM Withdrawals to Get
ATM users who withdraw cash very frequently will now be left to look out for an
important change since the withdrawal process will become more expensive in India
from May 1, 2025. The Reserve Bank of India approved a proposal from the National
Payments Corporation of India to increase ATM withdrawal fees.
The ATM operators asked for increased charges because their operational cost had
gone up, and so the above fee will become high when ATMs go beyond the
free transaction limits for you.
Why ATM Fees Are Getting Higher?
The applicants for the permission were made for raising the fees for ATM
transactions that a customer does using the ATM of any bank other than their
home bank. Thus, it seems that if you withdrew money or checked your balance at With the
ATMs of other banks, you will have to pay an extra higher fee as compared to the
earlier charges.
Cost Control was one of the justifications for this hike; White-Label ATMs (WLA)
operators made a demand stating that the maintenance of ATMs became expensive due
to all costs increasing. According to the RBI, the charges are raised to keep ATM services
available.
How Much Increase in ATM Fees?
Here’s how the new ATM charges will function:
Cash Withdrawal at ATM of Other Bank: If you’ve withdrawn cash from the ATM of
another bank, you had to pay ₹17 as a fee for every subsequent withdrawal after your
free transactions were used. The increased withdrawal fee now stands at ₹19.
Balance Inquiry at ATM of Other Bank: Checking balance earlier at an ATM not
Belonging to your bank would have cost you ₹6; from May 1, it will cost ₹7.
So now, if you are always using ATMs from different banks, you will burn deeper
holes in your pocket.
How Many Free Transactions Do You Get?
The fee will start above the free transaction limit. Once the limit is crossed, here’s
how many free ATM transactions are allowed: Metro Cities (Big Cities like Delhi,
Mumbai, Bangalore, etc.): You can avail only 5 free transactions at other banks’
ATMs in a month. For Non-Metro Cities (Smaller Towns & Villages): Only 3 free
transactions at other ATM’s in a month.
If you don’t exceed the free limit, you will not be charged extra. Going over this limit
will incur charges according to the new fee.
What are the White Label ATMs?
These ATMs are not owned by any banks but are managed by private players
Providing banking services to remote areas without the banks having any branches
there.
RBI introduced White-Label ATMs through the ATM Payment and Settlement System
Act in 2007, so as to increase the customer base of the banking setting in small
towns and villages.These ATMs allow customers to:
Withdraw cash using debit or credit cards
Make payments for various bills
Check account balance and mini statements
Request checkbooks
Deposit cash (in some cases)
Since operating these ATMs is expensive, WLA operators requested a fee hike to
maintain services. The RBI approved this request to ensure ATM availability in rural
areas.
How do you avoid paying extra ATM fees?
With the rising costs of ATM withdrawals, here are tips to avoid any extra
charges:
1. Use Your Home Bank’s ATM: Transactions at your own bank’s ATMs are
completely free (within the bank’s limits).
2. Plan Your Withdrawals Wisely: Withdraw larger sums at once instead of frequent
but smaller ones. This will keep you well within the free limit.
3. Use Digital Payments: Preferably UPI, debit cards, or mobile banking to reduce
the number of times you have to go for cash withdrawals, therefore minimizing your
ATM needs.
4. Check Balance Over the Internet: Use internet banking, mobile apps, or SMS
alerts to avoid using ATM balance inquiries, thereby avoiding additional charges.
Effect of the ATM Fee Hike
All the previous costs that increase ATM usage have mostly affected people who frequently
use other banks’ ATMs. It’s also encouraging a shift from cash withdrawals to more
digital transactions.
With the increase in ATM fees, it is hoped that ATM operators would relatively bridge
the gap by enabling them to maintain ATM facilities and keep them functional,
especially in rural and semi-urban areas where banking services are reduced.
Conclusion
Beginning May 1, 2025, withdrawal of funds from an ATM of a different bank will be
charged at ₹19 for each transaction, while checking the balance will amount to ₹7.
You could avoid such levies by sticking to the no-cost transactional limit alongside
the alternative method of cash-debit transactions using digital payments.
This is an effort at maintaining equilibrium in operations for ATM businesses while
ensuring the availability of cash withdrawal services throughout the length and
breadth of India. However, careful planning will be necessary by customers when it
comes to doing their transactions to save on accidental costs.
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