Check new charges here: ATM withdrawals to become costlier from May 1; minimum balance, credit card rules to be affected

Withdrawing cash from ATMs will become costlier from May 1, as the Reserve Bank of India (RBI) has raised interchange fees, a DD News report said, on Tuesday. This hiked fees will be applicable after customers have exceeded their free transaction limit – five transactions in metro cities and three in non-metro areas at other banks' ATMs.

According to the report, customers will have to pay an additional ₹2 for each transaction beyond the free limit. Fees for non-transaction fees has been hiked by ₹1 as well. Now, withdrawing cash from an ATM will cost ₹19 per transaction, up from the earlier ₹17.

Checking account balances will now cost ₹7 per transaction, as opposed to ₹6 previously, according to the official notification. The new banking regulations will also change credit card perks and saving account rules.

Minimum balance changes

SBI, Punjab National Bank, Canara Bank, and other institutions are updating their minimum balance rules. The required balance will now vary depending on whether an account is in an urban, semi-urban, or rural area. Not maintaining the prescribed balance may result in penalty charges.

Credit card benefits

Major banks, including SBI and IDFC First Bank, are altering their co-branded Vistara credit cards. Benefits like ticket vouchers, renewal perks, and milestone rewards will be discontinued. Axis Bank will implement similar changes starting April 18, affecting its Vistara credit cardholders.

What is an ATM interchange fees?

This fee is charged by a bank for providing ATM services to another bank. This fee, usually a fixed amount per transaction, is often passed on to customers as part of their banking costs.

The RBI decided to revise these charges following requests from white-label ATM operators, who argued that rising operational expenses were affecting their business, the report said.

The increase in charges will apply nationwide and is expected to impact customers, particularly those from smaller banks. These banks rely on larger financial institutions for ATM infrastructure and related services, making them more vulnerable to rising costs, it added.