In a move that has ignited political controversy, the Reserve Bank of India (RBI) has approved an increase in ATM withdrawal charges, effective from May 1, 2025. This decision permits banks to raise fees for transactions exceeding the mandated free monthly usage, a move that has drawn sharp criticism from the Congress party. Congress President Mallikarjun Kharge has accused the Modi government of exploiting citizens through heightened banking fees, alleging that banks have been reduced to mere collection agents under the current administration.​

According to the revised guidelines, customers will now incur a fee of ₹19 per financial transaction, up from the previous ₹17, and ₹7 per non-financial transaction, an increase from ₹6. These charges apply once customers surpass their monthly quota of free transactions, which includes five free transactions at their own bank's ATMs and a varying number at other banks' ATMs, depending on the location. This adjustment is anticipated to affect frequent ATM users, particularly those who rely on cash transactions.​

Mallikarjun Kharge has been vocal in his opposition to these changes, highlighting a series of charges levied by banks that he claims burden the common citizen. He points to fees for non-maintenance of minimum balances, inactivity fees, charges for bank statements, SMS alerts, loan processing, and even penalties for loan pre-closures and KYC updates. Kharge asserts that these cumulative charges represent a systematic exploitation of the public, exacerbated by the government's policies.​

The Congress party's critique extends beyond ATM fees. Kharge has previously accused the Modi government of facilitating the write-off of substantial loans for big businesses while neglecting the financial struggles of farmers and small-scale borrowers. He alleges that the government has written off loans worth over ₹14.56 lakh crore in the past nine financial years, benefiting large corporations at the expense of the average citizen.​

In response to these developments, financial experts suggest that consumers may need to adapt by increasing their use of digital banking platforms to mitigate the impact of rising ATM fees. The government's push towards a digital economy aims to reduce reliance on cash transactions, but this transition poses challenges, particularly for those in rural areas with limited access to digital infrastructure.​

As the implementation date approaches, the debate over the fairness and impact of increased ATM withdrawal charges continues to intensify. The Congress party's allegations highlight broader concerns about banking policies and their implications for economic inequality in India. Whether these fee adjustments will lead to significant behavioral shifts among consumers or prompt policy revisions remains to be seen.

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