ATM Cash Withdrawal Charges to Rise From May 1: Check New Fees

Starting May 1, withdrawing cash from ATMs will become more expensive as the Reserve Bank of India (RBI) has approved an increase in ATM interchange fees. 

This fee is the amount one bank pays another for allowing its cardholders to use their ATM services. The revision aims to cover the growing costs of maintaining ATMs and providing enhanced services to customers of other banks.

What Are the New ATM Charges?

As per the new charges:

• Customers who exceed their free withdrawal limit will have to pay an additional ₹2 per transaction.
• The cost of withdrawing cash from ATMs will increase from ₹17 to ₹19 per transaction.
• The fee for checking account balances at ATMs will rise from ₹6 to ₹7 per transaction.

Applicability of New ATM Transaction Charges

These revised charges will only apply once customers surpass their monthly free transaction limit. 

Currently, account holders are allowed 5 free transactions per month at ATMs of other banks in metro cities and 3 free transactions in non-metro areas. 

After exhausting these limits, the new transaction fees will be applicable.

Failed ATM Transactions and Free Transaction Limit

Bank customers often face failed ATM transactions due to technical errors, raising concerns about whether these unsuccessful attempts count toward the free transaction limit.

As per an RBI circular (dated August 14, 2019), failed transactions caused by technical issues — including hardware or software malfunctions, communication errors, lack of cash in the ATM, or invalid PIN entries — are not counted as valid transactions. Consequently, no charges apply in such cases.

Impact on Customers and Banks

This increase in ATM fees follows recommendations from the National Payments Corporation of India (NPCI) and is part of an RBI-authorised revision. Banks and white-label ATM operators have long requested a fee hike, citing escalating operational expenses that made previous charges unsustainable.

Smaller banks, which have fewer ATMs and depend on larger banks’ ATM networks for their customers’ withdrawals, are expected to feel a greater impact. Customers who frequently use ATMs outside their home bank’s network will also face higher costs, making digital payment alternatives more attractive.

Conclusion

The hike in ATM withdrawal and balance inquiry fees reflects the increasing cost of maintaining ATM infrastructure and services. While the changes will not affect those staying within their free transaction limits, customers who rely heavily on ATMs beyond their bank’s network should be prepared for additional charges starting May 1.

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