New Delhi: ATM users across India will now have to pay more for cash withdrawals and balance inquiries at machines, starting from 1 May. The Reserve Bank of India (RBI) has approved a revision in interchange fees, impacting both customers and banks.
As per the new rules, ATM usage beyond the free transaction limits will attract higher charges:
Cash withdrawal fee: The banks can charge a maximum of Rs 23 per transaction, excluding taxes.
Balance inquiry fee: The banks will be changing the Rs 9.
These charges come into effect after the free monthly limit, five free transactions in metro cities and three in non-metro areas, is exceeded.
RBI Moves on NPCI Proposal
The fee hike follows a proposal by the National Payments Corporation of India (NPCI), which cited the growing operational costs faced by banks and white-label ATM (WLA) operators. WLA operators, which offer ATM services independently of banks, have been pressing for this revision, pointing to increased costs for infrastructure, maintenance, and cash management. The RBI’s decision reflects a broader trend of revisiting long-standing cost structures in India’s banking infrastructure amid rising inflation and operational expenses.
Impact on Customers and Smaller Banks
The revised charges are expected to hit frequent ATM users, particularly those who depend on non-home bank ATMs. While larger banks operate extensive ATM networks, smaller banks and regional financial institutions may face added pressure, as they rely more heavily on other banks’ ATM networks to serve their customers.
This could translate into higher account maintenance fees or additional charges to recover costs. Customers may look to digital payments or mobile banking as a workaround to avoid physical ATM use, especially in urban areas where UPI and wallet-based payments are more accessible.
