RBI allows banks to charge customers Rs 23 per ATM transaction from May 1

Additionally, the RBI has said the ATM interchange fee will now be decided by the ATM network

Don't want to miss the best from Business Standard?

Starting May 1, customers will have to pay ₹23 per transaction at ATMs beyond the mandatory free transactions provided by their banks.

 

Currently, banks charge ₹21 per transaction for exceeding the free limit.

 

Customers are eligible for five free transactions, inclusive of financial (cash withdrawal) and non-financial transactions (balance enquiry etc) every month from their own bank ATMs.

 

They are also eligible for three free transactions from other bank ATMs in metro centres and five transactions in non-metro centres.

 

Since January 1, 2022, banks have been charging customers ₹21 per ATM transaction beyond the free transaction limit.

 

So, after over three years, the Reserve Bank of India (RBI) has increased the ATM fee by ₹2.

 

"This increase will help banks and service providers alike as the additional revenue stream can offset the escalating costs of maintaining and securing ATM networks, especially amid rising inflation and technology demands", said Vishal Maru- Global Processing Head, Financial Software and Systems (FSS).  

 

Additionally, RBI has said the ATM interchange fee will now be decided by the ATM network.

 

As of February 2025, there are 258,000 ATMs and cash recycler machines in the country.

 

Previously, on March 6, the National Financial Switch (NFS) steering committee approved increasing the ATM interchange fee for domestic financial and non-financial transactions to ₹19 and ₹7, respectively.

 

The committee meets periodically (at least 2 times in a year) to evaluate the key performance parameters of NFS and to discuss other opportunities and challenges which may arise from time to time.

 

Following this, the National Payments Corporation of India (NPCI) requested the RBI to implement the change in interchange fees.

 

RBI, vide its letter on March 11, communicated that ATM interchange fee can be decided by the ATM networks.

 

As a result, NPCI — in a circular on March 13 — revised the interchange fees levied in the NFS network for pan Indian NFS ATM transactions by ₹2, effective May 1.

 

Accordingly, interchange for domestic financial transactions has been set at ₹19 and for non-financial transactions, it is ₹7.

 

The revised interchange is not applicable for micro-ATM, interoperable cash deposit (card and UPI-based), and international ATM transactions. Such transactions will continue according to the existing rates.

 

At present, there are 1,349 NFS members, up from 1,296 in February last year, according to NPCI data. 

Costly affair

 

> Currently, banks charge ₹21 per transaction for exceeding free limit

> Customers eligible for five free transactions, inclusive of financial and non-financial transactions every month

> Also eligible for three free transactions from other bank ATMs in metro centres and five transactions in non-metro centres

> The revised interchange not applicable for micro-ATM, interoperable cash deposit, and international ATM transactions