From May 1, you will now have to pay more charge for withdrawing money from ATM. Reserve Bank of India i.e. RBI has issued a notification announcing the increase in interchange fee. This means that customers who depend on ATM for financial transactions will have to pay additional charge for exceeding their free transaction limit.
Now you will have to pay ₹ 19 charge for withdrawing cash from ATM
According to the official notification, from May 1, customers will have to pay an additional 2 rupees for every financial transaction from ATM after the free limit is completed. Due to this fee hike, now you will have to pay 19 rupees charge for every transaction to withdraw cash from ATM, which was earlier 17 rupees.
Now 7 rupees will be charged for checking balance
On the other hand, the fee for non-financial transactions like balance inquiry has been increased by 1 rupee. That is, now 7 rupees will be charged on every transaction for checking account balance, which was earlier 6 rupees.
What is ATM interchange fee?
ATM interchange fee is a charge that one bank pays to another bank for providing ATM services. This fee is usually a fixed amount charged on every transaction, which is often added to the customers as part of their banking cost.
How many free transactions can be done from ATM?
Customers are allowed a limited number of free transactions every month at ATMs of different banks. In metro cities, customers are allowed 5 transactions, while in non-metro cities 3 transactions are allowed. If the number of free transactions is exceeded, customers have to pay additional charges.
RBI took this decision after the request of ATM operators
RBI decided to revise these charges after the request of white-label ATM operators. ATM operators had argued that increasing operational expenses were affecting their business. The increase in ATM charges will be applicable across the country. This may affect the customers of small banks. These banks depend on large financial institutions for ATM infrastructure and related services. This is the reason why the impact of increasing costs is more on such banks.
Digital payments have affected ATM service
Digital payments in India have affected ATM service. The facility of online wallet and UPI transactions has reduced the need for cash withdrawal to a great extent. According to government data, digital payments worth Rs 952 lakh crore were made in India in the financial year 2014. By FY23, this figure had increased to Rs 3,658 lakh crore. This figure reflects the shift towards cashless transactions.
1,611 crore UPI transactions took place in February
In February 2025, 1611 crore transactions were done through Unified Payment Interface (UPI). During this period, a total amount of Rs 21.96 lakh crore was transferred. The number of transactions has increased by 33% on an annual basis.
Read Also:
- The Role Of Money In The Financial System
- Bitcoin Money
- Artificial Money And Its Lifecycle
- Historical background Of Money
- Demerits / Disadvantages Of Money
- Money: Concept, Functions and Role
- 5 Functions Of Money
- Forms Of Money
- What Is Money
- Experts To Investigate Allegations Of Student Loan Fraud
