The Reserve Bank of India (RBI) has announced an increase in ATM withdrawal fees, which will take effect on May 1, 2025. Consumers will now be required to pay Rs 23 for each transaction after using up their free monthly limit. Compared to the current fee of Rs 21 per transaction, this is an increase.
Customers will still be eligible for a certain number of free ATM transactions each month, regardless of the fee increase. RBI guidelines state that bank account holders will get:
Each month, they can make five free transactions (both financial and non-financial) at their own bank's ATM.
Three free transactions per month at other banks' ATMs in major cities.
Five free transactions per month at other banks' ATMs in non-metro areas.
Customers who exceed these limits will have to pay Rs23 per withdrawal.
Why has the RBI increased ATM fees?
The RBI used the need to pay for growing operational expenses associated with ATM maintenance as justification for the increase. In 2021, the central bank raised the ATM withdrawal fees from Rs 20 to Rs 21.
Banks have to pay for security, ATM upkeep, and cash management. The purpose of the fee increase is to assist banks in recovering a portion of these expenses.
The fee increase will require regular ATM users to plan their withdrawals more carefully to avoid incurring additional costs. Many banks encourage their customers to use digital banking services like UPI, internet banking, and mobile wallets in order to reduce their reliance on cash withdrawals.
The State Bank of India (SBI) profits handsomely from ATM withdrawal fees, according to government data. On the other hand, several public sector banks (PSBs) have been struggling financially, thanks in part to the high cost of running ATMs.
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