Withdrawing cash from ATMs is set to get a bit heavier on the wallet starting May 1, as the Reserve Bank of India (RBI) has decided to hike the interchange fees. This means if you withdraw cash beyond your free monthly quota, you’ll have to pay more than you used to.
Right now, customers can use other banks’ ATMs up to five times a month in metro cities, and three times in non-metro areas, without paying a fee. Once you go over that, the charges will apply—and they’re going up.
The interchange fee—basically the amount your bank pays to the ATM provider when you use a machine that’s not your bank’s—is going up. And naturally, banks usually pass that on to you. So, instead of ₹17 per cash withdrawal beyond the free limit, you’ll now be charged ₹19.
Not just that. Even non-cash transactions, like checking your account balance at an ATM, will cost more—₹7 per transaction, up from the earlier ₹6.
Why the hike? As per a DD News report, white-label ATM operators—private companies that run ATMs not tied to any particular bank—had been pushing for a revision. They said that rising operational expenses were eating into their business. The RBI seems to have taken note and responded with these revised charges.
The hike could hit customers of smaller banks harder. These banks often don’t have their own ATM networks and depend on larger banks or white-label operators. So, more usage of external ATMs could mean higher fees passed on to users.
Some big names—SBI, Punjab National Bank, Canara Bank, and others—are also tweaking their minimum balance rules. The required balance will now differ based on where the account is held—urban, semi-urban, or rural. Fall short, and you might face penalties.
It’s not just ATMs. Credit card benefits are also being trimmed. Banks like SBI, IDFC First Bank, and Axis Bank are revising their co-branded Vistara credit card offers. Expect to see perks like flight ticket vouchers, renewal benefits, and milestone rewards being discontinued or reduced. Axis Bank’s changes will kick in on April 18.
