ATMCharges Increase, Rural Banks Merging: Learn What Will Alter as of May 1, 2025
Financial Changes effective May 1, 2025
Starting next year, some significant changes are coming to the financial landscape of the country. Among the key adjustments, ATM transaction charges and the consolidation of rural banks are top priorities.
ATM Withdrawal Fee Uptick
Following the Reserve Bank of India's (RBI) approval, banks will be charged more for using another bank's ATM services. Customers will pay a slight hike when withdrawing cash, with fees rising to ₹23 per transaction once the free monthly limit is reached. This marks an increase from the current charge of ₹21 per transaction[2][4].
The free transaction limits are staying put. Customers get:
- 5 free transactions at their bank's ATMs every month.
- 3 free transactions at other banks' ATMs in urban areas.
- 5 free transactions at other banks' ATMs in suburban and rural areas[2][4].
*For Further Insight | ATM Withdrawals to Cost More from May 1: Check New Fees*
Consolidation of Rural Banks
The Centre recently embarked on the 'One State-One RRB' consolidation drive, which will take effect on May 1, 2025[2]. Initiated in 11 states, 15 RRBs across 11 states will be combined into one, aimed at enhancing operational efficiency and cost reduction.
With this fourth round of regional rural bank (RRB) consolidation, the number of RRBs will go down to 28 from the current 43[2].
Savings Account and Fixed Deposit (FD) Interest Rates Unchanged
As of now, there's no updated information on changes in savings account or fixed deposit (FD) interest rates starting May 1, 2025. More details will likely be announced separately by banks or the Reserve Bank of India[3].
[1] - Implemented changes to better manage the rural banking system and boost efficiency.[2] - 'One State-One RRB (Regional Rural Bank)' consolidation drive takes effect on May 1, 2025 in 11 states, reducing the number of RRBs to 28 from the current 43.[3] - There are currently no updates on changes to savings account and fixed deposit (FD) interest rates for May 1, 2025. More information will likely be shared in a separate announcement.[4] - The ATM withdrawal charge increases from ₹21 to ₹23 starting May 1, 2025 for transactions exceeding the free monthly transaction limit. The free transaction limits remain the same.
- The increase in ATM transaction fees to ₹23 per transaction beyond the free monthly limit, effective May 1, 2025, follows the Reserve Bank of India's approval.
- The consolidation of rural banks, as part of the 'One State-One RRB' drive, will reduce the total number of such banks from 43 to 28, with this consolidation scheduled to take effect on May 1, 2025.
- The interest rates for savings accounts and fixed deposits (FDs) have not yet been updated for May 1, 2025, and further details on potential changes are expected to be announced separately.
- In terms of personal-finance, small businesses should be aware of the increased ATM withdrawal fees and the consolidation of rural banks as part of the financial changes coming into effect starting May 1, 2025.
