The Reserve Bank of India has allowed banks to increase charges on ATM cash withdrawals beyond the free monthly usage by Rs 2 to Rs 23 per transaction from May 1.

Customers are eligible for five free transactions (inclusive of financial and non- financial transactions) every month from their own bank’s automated teller machines (ATMs).

They are also eligible for free transactions (inclusive of financial and non-financial transactions) from other banks’ ATMs -- three transactions in the metros and five in non-metro centres.

"Beyond the free transactions, a customer may be charged a maximum fee of Rs 23 per transaction. This shall be effective from May 1, 2025," the RBI today said in a circular.

Currently, banks are allowed to charge Rs 21 per transaction, after a customer exhausts the free transaction limit.

The RBI further said the instructions shall also apply to transactions done at cash recycler machines, other than for cash deposit transactions.