ATM New Charges : The accordion-sounding beep of the ATM machine emitting cash is going to get a little more expensive.
General informationEarly last Tuesday, the Reserve Bank of India (RBI) declared that ATM charges had been completely overhauled, a move that will affect millions of banking customers in India.
After a week of running around talking to bank officials, financial experts and even common folk standing in long queues outside ATMs across a good portion of Delhi-NCR, I bring to you a comprehensive break down of what these changes mean to your wallet.
“Hamari jeb par aur bojh padne wala hai,” (Our pockets will be further burdened)” sighed Ramesh Kumar, 58, a retired government employee whom I met at a Punjab National Bank ATM in Connaught Place.
His worry is shared by many others who depend largely on cash withdrawals for their monetary expenditure.
ATM New Charges The New Fee Structure Decoded
Effective July 1, 2025, the ATM transaction fees is experienced the largest revision since 2021. Here’s a detailed look at the new structure:
Own-Bank ATM Transactions
Earlier, most banks permitted five free transactions in a month in their own ATMs in metro cities and 7 in non-metros. Under the new guidelines:
Metro Cities (Delhi, Mumbai, Chennai, Kolkata, Bengaluru and Hyderabad):
Free transactions cut from five to three per month
Charges after free limit: ₹25 per financial transaction (₹20 earlier)
Balance inquiry and mini-statement: ₹12 per transction (previously ₹10)
Non-Metro Locations:
Free transactions have been slashed to five a month
Charges beyond free limit: ₹22 per financial transaction (up from ₹18)
Balance enquiry and mini-statement: ₹10 per transaction (remain unchanged)
“The decrease in free transactions will hit urban customers who prefer to transact from a single bank ATM,” Vikram Mehta, who is a branch manager with HDFC Bank’s South Extension branch in Delhi, said.
“The purpose of levying charges beyond the free limit is to encourage acquirers /merchants to accept as many instruments as possible for digital transactions, and not to make money by penalising farmers and exporters through MDR fees on usage of low-cost digital modes,” it said.
Other-Bank ATM Transactions
Changes here are more significant and will likely be felt by a wider array of customers:
Metro Cities:
Two free transactions (down from three)
Charges beyond free limit: ₹27 per financial transaction (₹21 currently)
Balance inquiry mini-statement: ₹12 per transaction (increased from ₹10)
Non-Metro Locations:
Limit on free transactions lowered to 3 per month (from 5)
Charges beyond free limits: ₹25 per financial transaction (₹20 previously)
Balance inquiry and mini-statement: 12 per transaction (up from 10)
At a bustling market in Gurgaon where I visited, a few customers were seen getting their number of transaction note on an SBI ATM.
“I never knew that consumers had to keep a count on ATM usage, but now I will have to,” said Priya Sharma, 34, an IT professional. “At 27 rupees per transaction after the free limit it adds up quickly if you don’t pay attention.”
ATM New Charges Special Category Accounts
Some account holders won’t feel the squeeze as much. Some account types are still being favored:
BSBDA (Basic Savings Bank Deposit Account): Will retain provision of having five free transactions (both financial and non-financial) per month and no charge for any of them, provided the deposit- holder maintains the minimum balance equivalent to 75 per cent of the amount applicable for a regular savings account.
This leave is crucial for Jan Dhan account holders.
Senior Citizen Accounts (holders over 65 years of age): Like before, most big banks will allow two extra free transactions at the ATM of any other bank, however, this is a bank policy and not a ‘rule’ as set by the central bank.
Premium Account Holders (circumstantial, minimum balance typically being ₹1 lakh or more): free transactions capping is likely to be relaxed for such customers; it remains between 7-10 depending on the bank and the type of account.
“The story of ATM value is really about account segmentation,” said Rajiv Anand, a banking industry analyst with whom I spoke for this article.
“Banks are using ATM limits differently and that’s a way to nudge the customer to have more money in the account.
ATM New Charges The Why Behind The Hike
The RBI has attributed the reason for this downward revision as follows:
High Operating Expenses: ATM overheads have increased substantially – including security, software and physical maintenance costs – so anyone relying on the same 5-year old costings is certainly out of date.
Promoting Digital Payments: Some aspects of the increase in charges are aimed at pushing through more payments through UPI, IMPS and other medium that the banks do not need an additional conversion for the same which should be cheaper than cash.
Network Optimizations: A good number of ATMs (especially in cities, are far from being fully utilized leading to inefficiencies in the entire ATM network.
In a frank talk with a senior banking source who did not want to be named, I was told that ATM operations are becoming more costly.
“The cost per transaction has increased by around 30% since the last update of fees in 2021, mainly due to the higher security demands and rising electricity and real estate prices,” it said.
The Indian Banks’ Association (IBA) is said to have asked for a bigger increase but the political considerations were balanced with the operational feasibility by the RBI, sources added.
ATM New Charges Real Life Customer Impact across Customer Segments
To grasp the specifics of these changes, I looked at breakdowns of withdrawals by demographics:
Urban Salaried Professionals
For someone like Amit Khanna, a 42-year-old corporate worker I interviewed in Noida, it would make a difference.
“Usually it’s 6-7 times a month I’ll get cash from whatever ATM is close by, either near my office or near my house. “That is another ₹100-150 more in additional monthly charges,” he calculated.
The higher fees could also make more urban professionals flock to digital alternatives, including for smaller transactions.
But money is still king for a lot of daily costs such as local taxis, neighborhood grocers and domestic help payments.
Small Business Owners
Small traders and shopkeepers who are mainly cash dependent are the worst affected.
“I have to take out cash almost every day to maintain float for my shop,” said Mr. Imran, who has a small general store in Old Delhi. “These higher rates are certainly going to increase my costs of doing business.”
And for store owners who take out more but do so more often, those higher, per-transaction fees account for a larger piece of their overhead.
Let’s take the example of a shopkeeper who withdraws money 15 times a month over the free limit. After paying a fee, he might face an extra charge of ₹375-400.
Rural and Peri-Urban Dwellers
ATM accessibility makes the situation more complex in rural regions. “In my village, there is only one bank ATM within 10 kilometers,” said Rampal Singh, a Haryana farmer I spoke to outside a public sector bank branch in Delhi. “We can’t afford to pick and choose between own-bank and other-bank ATMs.
This reduction in other-bank free transactions is particularly a concern for rural people since many banks have very low ATM presence outside of urban areas. That might expand the urban-rural gulf in the convenience of banking.
ATM New Charges Bank-Level Reactions and Competitive Tactics
Banks are taking different positions on how they plan to keep the customer happy in light of these regulatory changes:
T+1 Get 2 more free own-bank ATM transactions A month for own-bank ATM transactions For customers maintaining AMB of ₹50,000 and above, HDFC Bank offers two more free own-bank ATM transactions!
Reportedly, SBI is working on “cash back” feature which will reimburse ATM charges to customers who accomplish a minimum amount of digital transactions a month.
ICICI Bank has enhanced its mobile banking app to offer clearer visibility of the balance number of free ATM transactions and proactive alerts when they are nearing the allowed free limit.
Axis Bank has rolled out a promotion offering the customers to maximize cash withdrawal by withdrawing more and withdrawing less often.
When I visited several bank branches in South Delhi, I saw new signage detailing the new changes and customer service reps actually informing customers how to avoid ATM charges.
ATM New Charges How to Save Your Wallet
Here are some tactics — based on interviews with banking experts and financial planners — to minimize the impact of these higher fees:
Combine transactions: Wherever possible and when it makes sense, combine your transactions, rather than making multiple smaller transactions, to avoid using up your free transactions.
Take Advantage of Home Branch ATMs: Use your bank’s ATMs when ever possible as they have the higher free transaction limit.
Cash-back at Retailers: Some stores, grocery stores, supermarkets, or big-box retailers will allow you to request cash-back when making a purchase with your debit card, which then becomes free “withdrawals.”
Explore Account Upgrades: Do the math to see if upgrading to an account with more free transactions might save you money if you use the ATM a lot.
For Small UPI transactions, Keep Cash Withdrawal: Keep the cash withdrawal only for the requirements when digital payments are not accepted to make payments through UPI, mobile banking, or net-banking.
“The bottom line is that people need to be more mindful when it comes to using ATMs,” said Deepak Sharma, a financial planner I spoke to.
“As a general rule, most people don’t pay attention to their withdrawal frequency, but obviously, if you pay attention to when and where you’re withdrawing from, you can end up saving quite a bit over time.”
Future of ATM Services: What’s Next?
These tariff changes capture greater shifts in India’s changing payment ecosystem.
For all but the most bullish coin enthusiasts who would rather part with their dirty fiat, cash is still king in a lot of cases, but its preeminence has been ever so gradually waning in the face of digital options.
“We’re now in an era of transition,” said banking sector analyst Anand. “ATMs are not going away, but they are no longer the primary face of banking,” said Matt Schulz, a senior industry analyst at CompareCards.com, which analyzes the credit card industry.
What the Average Bank Customer Should Do: The immediate lesson here is fairly straightforward for the average bank customer: being more strategic about cash withdrawals is moving from a relatively good financial practice to a genuine necessity as the easy access of ATMs comes with the increasingly salient equivalent of a price tag.