Starting May 1, withdrawing cash from ATMs will become more expensive, as the Reserve Bank of India (RBI) has approved an increase in interchange fees for ATM transactions.
According to reports, the central bank has raised the ATM interchange fee by ₹2 for financial transactions and ₹1 for non-financial transactions. As a result, the cost of withdrawing cash will rise from ₹17 to ₹19 per transaction, while balance inquiries will now cost ₹7 instead of ₹6.
Who Will Be Affected?
Customers who frequently withdraw money from ATMs of other banks will bear the impact of the fee hike, especially after exceeding their free transaction limit. Currently, customers in metro cities get five free ATM transactions per month, while those in non-metro areas get three. Once these limits are crossed, banks charge customers per transaction.
Why the Fee Hike?
The increase follows a proposal by the National Payments Corporation of India (NPCI), backed by white-label ATM operators, who argued that the previous fee structure was insufficient to cover rising operational costs. Smaller banks, which rely more on the ATM networks of larger banks due to limited infrastructure, are expected to be significantly impacted.
With ATM usage costs rising, customers may need to rethink their withdrawal habits or explore alternative digital payment options.
