SBI's ATM Fee Hike: When Convenience Costs More

State Bank of India (SBI) has ended unlimited free ATM access for salary account holders, marking a major shift in India’s retail banking landscape. Effective December 1, 2025, India’s largest bank has capped free non-SBI ATM transactions and increased withdrawal charges, impacting millions of salaried and savings account customers nationwide.

The revision SBI’s first ATM fee change since February 2025 comes as rising interchange costs and a broader push toward digital payments reshape how banks price convenience.

What Has Changed in SBI ATM Rules

Under the revised structure:

1. Salary account holders:

Free non-SBI ATM withdrawals capped at 10 per month

2. Savings account holders:

Continue to get 5 free non-SBI ATM transactions per month

3. Beyond free limit:

Cash withdrawal fee: ₹23 + GST (up from ₹21)
Non-financial transaction fee (balance enquiry, mini statement): ₹11 + GST (up from ₹10)

Previously, salary account holders enjoyed unlimited free ATM withdrawals, making this change particularly significant.

Who Pays the Most

The impact is highest for customers who:

Work in areas dominated by non-SBI ATMs
Travel frequently
Make multiple small cash withdrawals

For example, a salary account holder making 15 non-SBI ATM withdrawals per month now pays roughly ₹135–₹140 extra monthly, adding up to ₹1,600+ annually.

Current account holders face even higher costs:

Zero free non-SBI ATM transactions
Every withdrawal charged from the first use

Why SBI Increased ATM Charges

SBI cited higher interchange fees the charges banks pay each other when customers use another bank’s ATM. The Reserve Bank of India approved an industry-wide increase effective May 1, 2025, raising the per-transaction cap to ₹23. SBI absorbed these costs for several months before passing them on, signaling limited tolerance for margin pressure.

Who Is Exempt From the Hike

SBI has retained exemptions for key groups:

Basic Savings Bank Deposit (BSBD) accounts
Kisan Credit Card (KCC) holders – unlimited free non-SBI ATM use
SBI ATMs and ADWMs – unlimited free use
Cardless cash withdrawals – free across banks

These exemptions align with financial inclusion goals and rural banking realities.

Salary Account Holders Feel the Biggest Shock

Salary accounts often marketed as premium offerings lose a key benefit. Since employees typically cannot switch banks without employer coordination, SBI appears confident that customer churn will remain limited.

This move reflects a broader banking assumption: corporate salary customers have high inertia.

Digital Push or Cash Penalty?

SBI’s ATM fee hike fits into India’s broader digital payments strategy. With UPI and mobile banking now ubiquitous, banks are increasingly charging for cash-based convenience while keeping digital services free.

However, this shift disproportionately affects:

Rural users
Elderly customers
Cash-dependent workers

In many semi-urban areas, the nearest SBI ATM may be far away, making the ₹23 fee a regressive cost of access.

How Customers Can Reduce Charges

To avoid extra fees, customers can:

Use SBI’s 63,000+ ATMs
Withdraw larger amounts less frequently
Rely on UPI, YONO app, NEFT/RTGS
Track monthly free-transaction limits carefully

Those needing frequent ATM access may consider banks offering premium accounts—though these often require high minimum balances.

A Broader Banking Trend

SBI’s ATM fee hike follows recent IMPS charge revisions, indicating a clear trend:

Previously free services are being monetized

As lending margins tighten, banks increasingly depend on fee income. RBI regulations allow this as long as charges are transparent and within approved limits.