ATM Withdrawal Charges Hike: If you withdraw money from an ATM, then there is big news for you. According to a report, withdrawing cash from an ATM may become expensive in the coming days. Actually, according to the report of DD News on Tuesday, withdrawing cash from ATM is going to become expensive from 1 May.
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ATM Withdrawal Charges Hike: Let’s Know Why…?
This is because the Reserve Bank of India has increased the interchange fee. This increased fee will be applicable when customers withdraw cash from other ATMs even after exceeding the free transaction limit.
- The limit of free transactions from ATMs of other banks is five in metro cities and three in non-metro cities. Additional charges will be levied on subsequent transactions.
- An ATM interchange fee is a fee that one bank pays to another bank for providing ATM services. This fee, usually a fixed amount per transaction, is often passed on to customers as part of their banking costs.
How Much Will Be Charged for Which Service?
From 1 May, customers will have to pay Rs 2 extra for every financial transaction beyond the free limit. Charges for non-financial transactions, such as balance enquiries, will increase by Rs 1. As a result, withdrawing cash from an ATM will cost Rs 19 per transaction, up from Rs 17 earlier. As per the official notification,
From 1 May, the balance inquiry fee is also going to increase from Rs 6 to Rs 7. This means, if someone does not withdraw money from another bank’s ATM and just checks how much money is in his account, then this balance check also costs Rs 6 right now, which will increase by Rs 1 from 1 May.
ATM Withdrawal Charges Hike: Why was This Decision Taken?
The RBI decided to revise these charges following requests from white-label ATM operators, who argued that rising operational expenses were hurting their business. The hike in charges will be applicable across the country and is expected to impact customers, especially those of smaller banks. These banks rely on larger financial institutions for ATM infrastructure and related services, making them more vulnerable to rising costs.
Keep in mind that whether it is the ATM interchange fee or the balance enquiry fee, both the charges are borne by the customer’s pocket.
Demand for ATM has decreased due to an Increase in UPI Payments
Let us tell you that the ATM was once seen as a revolutionary banking service. However, it is struggling in India due to the rise of digital payments. The convenience of online wallets and UPI transactions has significantly reduced the need for ATM cash withdrawals.
Government data shows that the value of digital payments in India was Rs 952 lakh crore in FY14. By FY23, this figure is set to rise to Rs 3,658 lakh crore, indicating a massive shift towards cashless transactions.
🚨 #ATM Interchange Fee to Cost More from May 1, 2025
— Anjireddy Alavala🇮🇳 (@iamanjiiii) March 24, 2025
1️⃣ New Charges:
💵 Cash withdrawal fee: ₹17 → ₹19 per transaction
📊 Balance inquiry fee: ₹6 → ₹7 per transaction
📅 Effective from: May 1, 2025 pic.twitter.com/7rWzQKN6d8
ATM Withdrawal Charges Hike: Who will Suffer the Most Loss?
The customers of small banks will have to bear the brunt of the increase in the charges for withdrawing money from other ATMs. Small banks have very few ATMs of their own and even if they do have them, their proper maintenance is not possible.
For this reason, customers of small banks often withdraw money from the ATMs of other banks, whose ATMs are available in sufficient numbers and where money is available most of the time.
Jay Chavda He is the Founder and Writer of businesspulsecare.com. He is an I.T Engineer, Freelancer, Businessman. He posts Business, Stock/Share Market, Finance Related News and updates on the website. 🔗