ATM withdrawals to cost Rs 23 per transaction beyond free limit from May 1

Bank customers are eligible for five free transactions (inclusive of financial and non-financial transactions) every month from their bank ATMs

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The Reserve Bank of India (RBI) has announced a significant change in the fees associated with ATM cash withdrawals, effective May 1. This decision, communicated on March 28, permits banks to charge customers a maximum fee of Rs 23 per transaction for withdrawals that exceed the monthly free limit. This marks an increase from the previous cap of Rs 21 per transaction.

 

Details of the new fee structure

 

Under the revised guidelines, customers will continue to enjoy a limited number of free transactions each month. Specifically, they are entitled to:

 

Five free transactions at their own bank's ATMs.

 

Three free transactions at other banks' ATMs in metropolitan areas.

 

Five free transactions at other banks' ATMs in non-metropolitan areas.

 

Once these limits exceed, customers will incur a charge of Rs 23 per withdrawal. 

 

Currently, banks are allowed to charge Rs 21 per transaction, after a customer exhausts the free transaction limit.

 

The RBI said the instructions shall also apply, mutatis mutandis, to transactions done at cash recycler machines (other than for cash deposit transactions).

 

The circular further stated that the ATM interchange fee will be determined by the respective ATM network.

 

At present, the interchange fee per transaction stands at Rs 17 for financial transactions and Rs 6 for non-financial transactions across all centers.

 

Impact on customers

  For frequent ATM users, this fee increase may require more careful planning regarding cash withdrawals. Customers who often exceed their free transaction limits may find themselves incurring additional charges more frequently. As a result, many may consider switching to digital payment methods or utilising their home bank's ATMs more exclusively to avoid these fees.

 

Starting April, customers will experience not only ATM fee hikes, but also adjustments in credit card payment policies.

 

Axis Bank has announced modifications to the benefits of its Vistara Credit Card following Vistara’s merger with Air India. These changes will take effect for all renewals beginning April 18.

 

Meanwhile, SBI Card is revising its reward programme. Between March 31 and April 1, certain credit cards will provide fewer reward points for select transactions.