The implementation of new ATM transaction rules will begin on May 1, 2025, thus affecting regular ATM users throughout the nation. The Reserve Bank of India (RBI) has authorized higher fees for transactions exceeding the free-limit because of increased costs of ATM maintenance and servicing customers from other banks.
Under the new ATM transaction rules, customers will retain their monthly free ATM transaction allowance of three in metro cities and five in non-metro cities. The free transaction allowance includes both financial and non-financial operations. The new rate for additional transactions after reaching the free limit will be Rs 23 instead of the previous Rs 21.
Indian banks maintain the same free transaction policy for their savings account customers. Customers can perform five free transactions at their bank’s ATMs and three free transactions at other-bank ATMs within metro areas. Customers in non-metro cities will receive five free transactions when using ATMs from other banks.
Major banking institutions including HDFC Bank, IndusInd Bank, Punjab National Bank and Kotak Mahindra Bank have already notified their customers about the upcoming changes. The banks stated that their customers will need to pay fees only for cash withdrawals that exceed the free transaction limit but non-financial operations will continue to be free at their ATMs.
The increase in fees resulted from National Payments Corporation of India (NPCI) recommendations because operational costs for banks and white-label ATM operators have kept rising. The customer base of smaller banks will experience the most significant effects because they rely heavily on the ATM networks of major banks.
