New ATM rules from May 1, transaction charges to increase after free limit
There will be three free ATM transactions in metro areas and five in non-metro areas, and they will include both financial and non-financial transactions.
The Reserve Bank of India (RBI) has updated the framework for ATM charges, which will be effective on Thursday (May 1). The changes will affect free transaction limits, charges for additional transactions, and interchange fees in the country's banking system.
According to the new rules, customers can use the ATM for a set number of transactions in a month, after which a fee will be charged. There will be three free transactions in metro areas and five in non-metro areas, and they will include both financial and non-financial transactions.
Once the transaction limit is reached, a customer may be charged ₹23 for every additional transaction that they make using the ATM and the Cash Recycler Machines (CRMs). But the charges won't be applicable for depositing cash through the CRMs.
While only the financial transactions will be counted when a customer uses their own bank’s ATM, both financial and non-financial transactions will be counted for other banks.
Also read: RBI allows minors above 10 years to operate savings bank accounts independently
The reason for the RBI decision
The RBI’s decision comes as there is a need to ensure the financial viability of ATM operations in the country. As per data reported by Livemint, India had 2,16,706 ATMs as of January 2025, including 1,30,902 on-site and 85,804 off-site units.
These ATM operations have been impacted by several factors, including rising operational costs such as maintenance, cash handling, and technology upgrades. These factors have made it necessary to adjust the fee structure to support continued ATM availability, giving relief to smaller banks and white-label operators.
The RBI’s revision of ATM transaction charges, especially related to the withdrawal of cash, reflects a broader effort to balance customer convenience with the rising cost of ATM operations. While the fee increase is modest, it signifies an evolving financial ecosystem where digital transactions continue to gain traction and physical cash handling demands more robust infrastructure support.
