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A customer counts 100 and 500 rupee banknotes after withdrawing them from an ATM in New Delhi, India, on Monday, Feb. 3, 2025. Photographer: Prakash Singh/Bloomberg | Photo Credit: PRAKASH SINGH
To increase the viability of the ATM business, the Reserve Bank of India (RBI) has increased the maximum amount a bank can charge its customers for transactions beyond the mandatory free transactions from ₹21 to ₹23 per transaction.
This increase comes in the backdrop of the National Payments Corporation of India (NPCI) recently upping the ATM interchange fee (paid by a bank when its customer uses another bank’s ATM) from ₹17 to ₹19 for financial transactions and ₹6 to ₹7 per transaction.
The increase in ATM interchange fees and customer charges are effective from May 1, 2025.
A bank can charge its customer up to ₹23 per transaction if his transactions exceed the mandatory free transactions at either its own or another bank’s ATM, RBI said in a circular.
Customers are eligible for five free transactions (inclusive of financial and non- financial transactions) every month from their own bank ATMs. 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 transactions in non-metro centres.
Mani Mamallan, Founder, Chairman & Managing Director, Electronic Payment and Services (EPS), said: “The ATM network can decide the interchange fee between banks. In the case of ATMs on the NFS (National Financial Switch) network, which is operated by NPCI, the fees will be revised to ₹19 for financial transactions and ₹7 for non-financial transactions with effect from May 1, 2025.
“But the customer can be charged up to ₹23 by a bank for transactions beyond the free ones. Now, it is up to the bank if it wants to charge or not charge the customer. ”
He noted that the ATM business is not growing as much as the industry wants it to – ATM numbers and transactions are not growing to the desired extent, but operating expenses are increasing. So, this increase in interchange fee and customer charges is a reprieve for those in the ATM business as it goes to the bottom line.
As at January-end 2025, there were 2.57 lakh ATMs across the country (2.58 lakh as at January-end 2024), with bank-owned ATMs standing at and White Label ATMs at 2.21 lakh (2.24 lakh) and 36,000 (34,000), respectively, per RBI data.
Published on March 28, 2025
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