RBI revises ATM transaction charges: Tips to avoid extra fees

May 3, 2025 Finance Talk Valli Sarvani

As digital banking becomes more widespread in India, the Reserve Bank of India (RBI) has revised its ATM transaction charges, effective May 1, 2025.

This new framework affects customers of all banks using ATM or Cash Recycler Machine (CRM) services across the country.

Under the revised rules, the maximum fee for ATM transactions beyond the free limit has increased from ₹21 to ₹23.

This fee is applicable to both financial transactions (such as cash withdrawals and deposits) and non-financial ones (such as balance checks or PIN changes).

It also applies to CRM transactions, except when depositing cash. Customers will continue to get five free ATM transactions per month from their own bank.

In metro areas, three additional free transactions are allowed at other banks’ ATMs. In non-metro cities, this extends to five free transactions at other banks as well.

After exceeding these limits, banks can charge up to ₹23 per transaction, plus applicable taxes.

The RBI also clarified that the interchange fee, what one bank pays another for allowing its customers to use their ATM, remains unchanged. It is currently ₹19 for financial and ₹7 for non-financial transactions.

While this fee is charged between banks, it indirectly influences customer charges when using ATMs outside their bank’s network.

Tips to minimise ATM Charges:

Track your free transactions: Know your monthly limits based on your city and ATM usage.
Use your own bank’s ATM: Stick to your bank’s machines to get more free transactions.
Withdraw larger amounts less often: Reduce frequency by taking out sufficient cash in fewer transactions.
Go digital: Use mobile banking apps or UPI for balance checks, fund transfers, and bill payments.
Avoid non-financial transactions at ATMs: Check balances or change PINs online instead.
Plan your ATM visits: Combine financial tasks to avoid multiple visits in a month.

With these changes, customers should stay mindful of their ATM usage.

Shifting toward digital options and managing transaction frequency can help avoid unnecessary fees and make banking more efficient.

Image from Pxhere (Free for commercial use / CC0 Public Domain)

Image Published on March 23, 2017