Starting May 1, withdrawing cash from ATMs in India will pinch a little harder, as the Reserve Bank of India (RBI) has approved a hike in interchange fees.

The decision, finalized on March 13 after a push from the National Payments Corporation of India (NPCI), raises the cost of financial transactions like cash withdrawals by Rs 2—from Rs 17 to Rs 19—while non-financial transactions, such as balance inquiries, will climb Rs 1, from Rs 6 to Rs 7.

The move, effective post-free transaction limits—five in metro areas and three in non-metro regions at other banks’ ATMs—aims to offset rising operational costs for white-label ATM operators, who’ve long argued the old rates were unsustainable amid inflation and maintenance expenses. T

he RBI’s nod follows a pattern: fees last jumped in 2021 from Rs 15 to Rs 17, with customer charges capped at Rs 21 per excess transaction since January 2022.

Banks remain mum on whether they’ll pass the burden to customers, but history suggests they will. “Over the past decade, every interchange hike has trickled down to users,” a senior banker told The Financial Express. Smaller banks with sparse ATM networks face the steepest hit, potentially shelling out more to larger operators.

For now, the free transaction quotas hold, but come May, frequent ATM users might feel the squeeze—or lean harder into digital payments.