Mumbai: The Reserve Bank of India (RBI) has permitted banks to increase charges on ATM cash withdrawals beyond the free monthly limit from ₹21 to ₹23 per transaction, effective May 1, 2025.

As per existing rules, customers are entitled to five free ATM transactions per month from their own bank's ATMs. Additionally, they can make three free transactions at other bank ATMs in metro areas and five in non-metro areas.

"Beyond the free transactions, a customer may be charged a maximum fee of ₹23 per transaction. This shall be effective from May 1, 2025," the RBI stated in a circular issued on Friday.

The revised fee structure will also apply to cash withdrawals at cash recycler machines (CRMs), except for cash deposits. The circular further noted that the ATM interchange fee—charged between banks for ATM transactions—will continue to be determined by ATM networks. The current interchange fee stands at ₹17 for financial transactions and ₹6 for non-financial transactions.

Shikhar Aggarwal, Chairman of BLS E-Services, highlighted the impact of the hike, saying, "This increase underscores the rising cost of cash transactions in India. While it may burden frequent ATM users, it also presents an opportunity for Business Correspondents (BCs) and digital-first players. Customers, particularly in rural and semi-urban areas, are likely to shift towards MicroATMs and BC networks, which remain fee-free for transactions."

The RBI's circular applies to all commercial banks, regional rural banks (RRBs), cooperative banks, authorized ATM network operators, card payment network operators, and white-label ATM operators.

As of January 2025, India had 1,30,902 on-site ATMs and cash recycler machines (CRMs) and 85,804 off-site ATMs.