ATM withdrawals set to cost you more from May 1 – here’s why

ATM withdrawal will soon cost more! Reserve Bank of India (RBI) and National payment corporation of india (NPCI) has approved the increase of ATM interchange fees for cash withdrawal to ensure trade stability. These revised fees will be effective from May 1.
This fee, card-making and charged between ATM-operating banks, eventually affects customer banking expenses. Currently, account holders in Bengaluru, Chennai, Hyderabad, Kolkata, Mumbai and New Delhi can make five free transactions in their bank monthly. ATM And three on machines of other banks. Sources indicate that the increased interchange fee will affect customers, although banks currently cover free transactions cost. According to RBI data, India operated 2,16,706 ATMs by January 2025.
The National Financial Switch Steering Committee supported an increase in ATM interchange fees on March 6, 2024, with domestic financial transactions at ₹ 19 and non-financial transactions at ₹ 7. Next, NPCI requested RBI’s support to implement these adjustments.
Also read Women’s Saman Savings Certificate: Avoiding 7.5% interest for two years in the last few days – Top Facts about Post Office Saving Scheme
On 13 March, NPCI communicated the update fee structure to its member banks, which has recently become public knowledge. These fees will be subject to additional goods and service tax (GST). Through correspondence on 11 March, RBI informed NPCI that the ATM network could independently set the interchange fee.
Members, according to the circular distributed to banks, which ET has investigated, NPCI has informed the RBI about the implementation date of the revised fee.
CMS Info Systems-Cash Management Solution, Cash Management Solutions, Cash Information Systens said, “This fee hike provides additional assistance to banks and white-labeled ATMs (WLA) operators, which can enable them to maintain and enhance ATM infrastructure.” “We guess the current fee adjustment will encourage banks to invest and expand their ATM networks, which will improve access and convenience to nationwide customers.”
Last year, a report by Financial Daily indicated that the ATM Operators Association suggested to increase the interchange fee to ₹ 23 for better commercial viability. The interchange fee saw an increase from ₹ 15 to ₹ 17 in 2021, while the maximum customer transaction fee increased from ₹ 20 to ₹ 21.
Also read If the bank fails, is your bank deposit insured? Explained till deposit insurance scheme up to Rs 5 lakh
ATM use has seen a steady decline. RBI figures demonstrate a decrease in cash withdrawal from more than 57 crore transactions in January 2023, increased to 52.72 crores in January 2024, by January 2025 to 48.83 crore. Nevertheless, cash is important in India’s economic scenario. 2021 interchange fee hike contributed to ATM network development. During FY24, monthly ATM withdrawal increased by an average by ₹ 1.43 crore, with an annual increase of 5.51%. NPCI’s correspondence specified and 7 interchange fee for balance inquiries in Nepal and Bhutan, except GST, while maintaining the current cash withdrawal rates. These revised fees exclude micro-ATMs, inter-operations cash deposits and international ATM transactions.