ATM Transaction Cost to Go Up by Rs 2 to Rs 23 From May 1
The RBI, in its notification, said that the ATM interchange fee—the charge a bank pays to another bank for offering ATM services—will now be decided by the ATM network;
The Reserve Bank of India (RBI) on Friday increased the maximum amount a bank can charge its customers for ATM transactions beyond the mandatory free transactions—from ₹21 to ₹23 per transaction—with effect from May 1, 2025. This comes after the National Payments Corporation of India (NPCI) recently increased the ATM interchange fee (paid by a bank when its customer uses another bank’s ATM) from ₹17 to ₹19 for financial transactions, and from ₹6 to ₹7 for non-financial transactions. Both increases—ATM interchange fees and customer charges—are effective from May 1, 2025.
Moreover, the RBI, in its notification, said that the ATM interchange fee—the charge a bank pays to another bank for offering ATM services—will now be decided by the ATM network.
Customers are eligible for five free transactions (inclusive of financial and non-financial transactions) every month from their own bank’s ATMs, the RBI said. They are also eligible for free transactions (inclusive of financial and non-financial transactions) from other bank ATMs—three transactions in metro centres and five 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 1, 2025,” it said.
India’s ATM network is largely managed by the National Financial Switch (NFS), a leading multilateral ATM network operated by the National Payments Corporation of India (NPCI).
This means that the ATM network can decide the interchange fee between banks. In the case of ATMs on the NFS network, which is operated by NPCI, the fees will be revised to ₹19 for financial transactions and ₹7 for non-financial transactions. However, the customer may be charged up to ₹23 by a bank for transactions beyond the free limit, and the onus will be on the bank to decide whether or not to charge the customer.
Public sector banks have collectively lost ₹925 crore during 2023–24 and 2022–23 by offering ATM cash withdrawal services to their customers. Of the 12 public sector banks, only the State Bank of India (SBI), with 65,000 ATMs, has been able to generate income. It earned ₹331 crore from ATM cash withdrawals in FY24, Minister of State Pankaj Chaudhary informed the Lok Sabha on Monday in response to a question.
As of January-end 2025, there were 2.57 lakh ATMs across the country (compared to 2.58 lakh at January-end 2024), with 2.21 lakh being bank-owned ATMs and 36,000 being White Label ATMs.
Vishal Maru, Global Processing Head, Financial Software and Systems (FSS), said, “The increase in ATM withdrawal charges 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. It’s an opportunity to reinvest in infrastructure, making ATMs more reliable and efficient. For solution providers like us at FSS, it’s a catalyst to partner with banks, deploying cutting-edge innovations that enhance functionality, security, and customer experience.”