Frequent ATM users will face higher charges beginning May 1, 2025. The Reserve Bank of India (RBI) has approved an increase in ATM fees for transactions exceeding the free-limit, citing the rising costs of owning, maintaining ATMs and servicing customers of other banks.
According to the new guidelines, customers will be allowed a fixed number of free ATM transactions each month, three in metro cities and five in non-metro areas. These free transactions will cover both financial and non-financial activities.
What are revised ATM fees?
Under the updated guidelines, customers who exceed their free monthly transaction limit will now be charged Rs 23 per transaction, up from the current Rs 21.
However, free ATM transactions remain the same – 5 free transactions per month at own-bank ATMs, 3 free transactions per month at other-bank ATMs in metro cities, and 5 free transactions per month at other-bank ATMs in non-metro cities.
There are no changes to the free transaction limits, which continue to apply to all savings account holders across Indian banks. Previously, the Rs 21 fee per additional transaction was introduced in 2022.
Major bank notify customers
Several big banks, like HDFC Bank, IndusInd Bank, PNB and Kotak Mahindra Bank, have already begun notifying customers of the changes.
“With effect from 1st May 2025, the ATM transaction charge rate beyond free limits will be revised from Rs 21 + taxes to Rs 23 + taxes, wherever applicable,” HDFC Bank said in a statement. The bank has clarified that at its ATMs, only cash withdrawals exceeding the free transaction limit will attract charges, while non-financial transactions will continue to be free.
IndusInd Bank has also updated its policy: “All Savings, Salary, NRI, and Current Account customers will be charged Rs 23 per transaction for ATM cash withdrawals at non-IndusInd Bank ATMs beyond free limits, effective 1st May 2025.”
Impact on smaller banks
The new charges will only apply once customers exceed their monthly free transaction limits. The increase is part of an RBI update based on recommendations from the National Payments Corporation of India (NPCI). Both banks and white-label ATM operators have been pushing for this revision due to escalating operational costs.
Smaller banks are expected to be hit harder, as they have fewer ATMs and their customers often rely on larger banks’ ATM networks. As a result, withdrawing cash or checking balances at out-of-network ATMs will become more expensive for many users.