ATM Withdrawal Charges Hike Sparks Political Outcry: Kharge Accuses Government of ‘Loot’

A recent decision by the Reserve Bank of India (RBI) to increase ATM withdrawal charges has ignited a political firestorm, with Congress President Mallikarjun Kharge accusing the Modi government of turning banks into “collection agents” for a “loot.”

The RBI has authorized banks to raise ATM cash withdrawal charges beyond the free monthly limit by ₹2, bringing the fee to ₹23 per transaction, effective May 1, 2025. This move has drawn sharp criticism from opposition leaders, who argue that it will disproportionately impact ordinary citizens.  

The RBI’s circular allows banks to charge a maximum of ₹23 per transaction after customers exceed their free monthly ATM usage. This is an increase from the previous ₹21 per transaction. The changes will take effect from May 1, 2025.

Mallikarjun Kharge has strongly condemned the hike, claiming that the government is facilitating a “loot” by burdening the common people.   He has stated that the government is making banks into collection agents. The increased charges are expected to affect frequent ATM users, particularly those who rely on cash transactions. It is expected to especially effect those from lower economic backgrounds.

The RBI has cited the rising costs of ATM deployment and maintenance as factors contributing to the fee increase.

There are also discussions around the interchange fees between banks, and how those fees are handled.

There is data that shows that some public sector banks are having trouble profiting from ATM services, while other banks such as SBI, are profiting.  

The ATM charge hike has become a focal point of political debate, with opposition parties criticizing the government’s economic policies. The issue is likely to remain a subject of contention in the coming weeks.