In a recent directive from the Reserve Bank of India (RBI), banks have increased charges on ATM transactions, introducing additional fees for every transaction beyond the free limit. This change is particularly significant for customers who frequently withdraw cash or use ATMs regularly. Previously, customers were allowed up to five free transactions, but this limit has now been reduced.
Effective from March 28, 2025, after RBI’s approval, customers will now incur a charge of ₹23 per transaction once they exceed their free limit. This increase comes as a shift from the previous fee of ₹21. The revised fee applies not only to cash withdrawals but also to non-financial transactions such as balance checks, mini-statement generation, and statement printing. To make matters worse, GST will also be added, potentially further increasing the overall cost of these transactions.
Free Transaction Limits: A Key Change
The new guidelines specify different transaction limits based on whether you reside in a metro city or a non-metro area:
- Metro Cities: 3 free transactions per month.
- Non-Metro Cities: 5 free transactions per month.
Once this limit is exhausted, any transaction performed at another bank’s ATM will attract a fee of ₹23. If you use your own bank’s ATM, you will be allowed up to five free transactions in a month, but additional transactions will also incur a ₹23 charge.
Impact on Frequent ATM Users
This change will primarily affect individuals who use ATMs frequently for both financial and non-financial transactions. For those who regularly withdraw cash or perform balance checks, the new fees could result in higher monthly costs. The introduction of charges for non-financial transactions, including mini-statements and balance inquiries, will add to the financial burden, especially for those who rely on ATMs for routine banking services.
Affected Banks
Several major banks have already implemented the new charges for ATM transactions. Leading institutions like the State Bank of India (SBI), HDFC Bank, Punjab National Bank (PNB), and IndusInd Bank have updated their policies. Customers have been informed that after the free transaction limit is exhausted, each transaction will incur a charge of ₹23 plus GST. Additionally, PNB has introduced a fee of ₹11 for non-financial transactions.
What Should Customers Do?
Customers are advised to pay close attention to their ATM transaction habits. If you do not need to withdraw cash, consider limiting your ATM usage to avoid additional fees. Opting to use your own bank’s ATM can help minimize costs and reduce the frequency of external ATM charges.
For those who often use ATMs outside their bank’s network, the new ₹23 fee per transaction could become a significant cost. As an alternative, using debit or credit cards for larger purchases or online transactions might help reduce the need for frequent cash withdrawals.
Conclusion
The increased ATM transaction fees may cause inconvenience, especially for those who rely on out-of-network ATMs or withdraw cash frequently. Additionally, non-financial transactions will now also come with a ₹23 charge, which could lead to higher costs for routine banking activities. Customers are advised to keep track of their free transaction limits and consider reducing ATM usage or sticking to their own bank’s ATMs to avoid extra charges.
This change could lead to a shift in how customers engage with their bank accounts, making it crucial for consumers to adapt to these new fees and find alternative, cost-effective ways to manage their finances.
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