New ATM cash withdrawal rule: Banks can charge up to ₹23 beyond free transactions from May 1, 2025

ATM cash withdrawals beyond the free limit will cost more from May 1, 2025. The Reserve Bank of India (RBI) on Friday said that a bank customer may be charged up to ₹23 per transaction for cash withdrawals at ATMs from May 1, 2025.

The enhanced charges of up to ₹23 per transaction will be imposed on ATM cash withdrawals that exceed the free monthly limits set by banks.

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

Customers can also make free transactions (inclusive of financial and non-financial transactions) from other bank ATMs as follows:

• Three transactions in metro centres

• Five transactions in non-metro centres.

"Beyond the free transactions, a customer may be charged a maximum fee of ₹23 per transaction. This shall be effective from May 01, 2025," the RBI said.

How much more will you have to pay?

The RBI has established a maximum cap for charges on ATM transactions exceeding the free limit.

Earlier, with effect from January 1, 2022, the RBI had allowed banks to increase the customer charges to ₹21 per transaction. However, on Friday, the Central bank allowed to charge up to ₹23. This means, cash withdrawals from ATM beyond the free limit from May 1 may increase by ₹2.

The RBI's instructions will also apply to transactions done at cash recycler machines (other than for cash deposit transactions).

The Central bank has decided that the ATM interchange fee can be decided by ATM networks. "The ATM interchange fee will be as decided by the ATM network," it said. This is a change from the past norm. Earlier in 2021, the central bank had set the interchange fee at ₹17 for financial transactions and ₹6 for non-financial transactions.