Key financial changes coming into effect on May 1: ATM fee hike and rural bank mergers
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Starting May 1, 2025, several significant financial changes will impact citizens across India.
The most notable shifts include an increase in ATM transaction fees and the government’s ongoing effort to streamline the rural banking sector through mergers.
Following approval by the Reserve Bank of India (RBI) to raise ATM interchange fees, bank customers will face higher charges for cash withdrawals after exceeding their free transaction limits.
From May 1, the new fee will be Rs 23 per transaction, up from the current Rs 21.
Customers are entitled to the following free transactions:
- Five free transactions per month at ATMs of their own bank (both financial and non-financial).
- Three free transactions per month at ATMs of other banks in metro cities.
- Five free transactions per month at ATMs of other banks in non-metro areas.
The government is pushing forward with its 'One State-One Regional Rural Bank' (RRB) initiative.
Beginning May 1, 2025, 15 RRBs across 11 states will be merged into a single entity per state. This consolidation aims to improve operational efficiency and reduce costs within the regional rural banking system.
This latest round of mergers will reduce the total number of RRBs from 43 to just 28, as the government seeks to enhance the overall performance of these banks.
As of May 1, RBL Bank will switch to monthly interest payments for savings account holders, a change from the previous quarterly payouts. Customers will receive interest based on the daily end-of-day balance, with the highest rate being 7% on qualifying accounts.
In another development, Shriram Finance Limited (SFL), part of the Shriram Group, has revised its Fixed Deposit (FD) interest rates. Senior citizens aged 60 and above will now receive an additional 0.50% interest per annum, while women depositors will enjoy an extra 0.10% interest per annum.