Day by day, the world is getting more and more digitalised and advanced. Be it the AI that’s taking over traditional art forms, or more digital options being introduced to track transactions, it’s hard to say whether we’re actually excelling or moving towards a disaster. 

Recently, The Reserve Bank of India (RBI) has put forward yet another approval. Moving forward, RBI Hikes ATM Withdrawl Fee after May 1, 2025, you may need to be more cautious in making your ATM transactions. And if you are someone who still likes to physically feel the money in hand, here may be bad news. In less than a month, there will be a hike in ATM fees. The hike amount may be small, but the effects will be far-reaching.  

So what’s changing? Why is it happening? And what can you do to avoid burning money on basic banking? Let’s break it down.

The Current Withdrawal-Free Limits

Before moving toward what’s changing, let’s quickly discuss what is the current transaction scene.

At present, if you make a transaction at your own bank’s ATM, you are entitled to five free transactions monthly. These transactions could either be financial or non-financial.

Financial transactions are the ones where you withdraw cash. Non-financial transactions refer to balance inquiries, mini-statements and the like. 

However, the free transaction limit changes when it is from another bank’s ATM.

• In Metro Cities, the free transaction limit in other ATMs is three per month.
• In Non-Metro Cities, the limit is five transactions per month in other bank’s ATMs.

Going beyond the free transaction limit, the user is charged a certain fee. The amount is as minimal as ₹21 for cash withdrawals and ₹6 for non-financial transactions.

What’s Changing in RBI Hikes ATM Withdrawl Fee

May 01 onwards, one still gets the same number of free transactions as now. This means, one still gets  5 free at own bank’s ATMs, 3 free at other banks’ ATMs in metro areas, and 5 free at other banks’ ATMs in non-metro areas.

Though, if one crosses these free transactions, they will have to pay an additional charge per extra transaction. For financial or monetary withdrawals, the fee would be ₹23. For non-financial transactions, the amount would be increased to ₹7.

So yes, even checking your balance too many times can now cost you more.

Why the Price Hike?

Many people argue that this is the government’s yet another way of fetching money from the general public. But the real reason? Rising operational costs. Think about it. With the world moving towards more digital ways of handling money, ATMs play a big role. Every other day, one requires to withdraw money or check the balance. While we may not realise, there are huge operational costs involved behind it. Banks and ATM providers say they now spend more to maintain ATMs, especially in remote or high-traffic areas. With more and more people requiring ATM service, it is only fair. The rise in costs and infrastructure, too, add to the expenses.

Some industry insiders also believe this could be a nudge toward digital banking, nudging users away from physical cash altogether.

Pro-Tips to Legally Dodge the RBI Hikes ATM Withdrawl Fee

Managing the ATMs’ expenses is their job, managing your expenses is yours. The rise in fee may be nominal to some, but to the majority, it is irksome. If you, too, would not like to throw money at your bank unnecessarily, here are a few tips that you can keep in mind:

• Instead of hitting the ATM every other day, you can simply plan your withdrawals. Just decide what amount you would require handy over the next few days and withdraw in one go.
• Instead of relying on cash, go digital when possible. UPI, mobile wallets, and net banking are faster and usually freer suitable alternatives.
• You can keep a track of your usage. Most banking apps now show how many free ATM uses you have left.

There’s nothing like using your own bank’s ATM. This is the safest option any day.

Conclusion

This fee hike might seem small on the surface, but it’s a gentle reminder that banking habits come with costs – especially if we’re not paying attention. Whether you’re someone who relies on ATMs regularly or just the occasional cash user, being aware of these changes helps you stay a step ahead.

So, the next time you visit an ATM, make it count.

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