The Central Government recently shared important financial insights about ATM cash withdrawal revenues earned by State Bank of India (SBI) and other Public Sector Banks (PSBs). According to data presented in the Lok Sabha by Pankaj Chaudhary, Minister of State for Finance, SBI has earned significant profits from ATM withdrawal charges, while other PSBs have reported major financial losses in this area.
SBI’s Profits vs. PSB Losses
Between 2019 and 2024, SBI earned a total profit of ₹2,043 crore from ATM transactions. In contrast, nine other PSBs collectively suffered losses amounting to ₹3,738.78 crore during the same period. This sharp contrast highlights SBI’s superior performance in generating fee-based income from ATM cash withdrawals.
Profitable Banks: PNB and Canara Bank
While most PSBs struggled, Punjab National Bank (PNB) and Canara Bank were exceptions. PNB earned ₹90.33 crore, and Canara Bank recorded a profit of ₹31.42 crore from ATM transactions during the past five years. However, their earnings pale in comparison to SBI’s impressive gains.
Detailed Bank-Wise Performance (FY 2019–2024)
Here’s a breakdown of how different PSBs fared over the past five fiscal years:
| No. | Bank | FY 19-20 | FY 20-21 | FY 21-22 | FY 22-23 | FY 23-24 |
|---|---|---|---|---|---|---|
| 1 | Bank of Baroda | -70.06 | -137.03 | -184.88 | -220.30 | -212.08 |
| 2 | Bank of India | -129.82 | -119.33 | -149.28 | -75.13 | -66.12 |
| 3 | Bank of Maharashtra | -52.28 | -42.12 | -47.94 | -46.26 | -44.48 |
| 4 | Canara Bank | 22.34 | -4.81 | 15.48 | 39.52 | -41.11 |
| 5 | Central Bank of India | -95.35 | -97.75 | -69.26 | -68.24 | -17.15 |
| 6 | Indian Bank | -41.85 | -89.53 | -151.54 | -161.70 | -188.75 |
| 7 | Indian Overseas Bank | -67.76 | -63.82 | -54.64 | -60.66 | -53.35 |
| 8 | Punjab & Sind Bank | 5.28 | -5.09 | -6.90 | -9.92 | -8.70 |
| 9 | Punjab National Bank | 102.40 | 68.87 | -27.63 | -25.66 | -27.65 |
| 10 | State Bank of India | 656.00 | 228.00 | 393.00 | 435.00 | 331.00 |
| 11 | UCO Bank | -58.09 | -49.23 | -56.48 | -62.23 | -61.86 |
| 12 | Union Bank of India | 3.17 | -104.84 | -167.42 | -195.88 | -203.87 |
Many other banks, including Bank of Baroda, Indian Bank, and Bank of Maharashtra, recorded consistent losses due to high operational costs and limited ATM revenue.
RBI Guidelines on Free ATM Transactions
The Reserve Bank of India (RBI) has established clear guidelines on free ATM transactions. Customers are entitled to:
- Five free ATM transactions per month at their home bank’s ATMs (including both financial and non-financial transactions).
- Three free transactions per month at other bank ATMs in metro cities.
- Five free transactions per month at other bank ATMs in non-metro areas.
Once the free transaction limit is exceeded, customers are charged based on their bank’s policies. Currently, the maximum charge per ATM transaction is ₹21, plus applicable taxes.
Increased ATM Fees Approved by RBI
To help banks cover the cost of operating ATMs, the RBI recently approved an increase in ATM fees:
- Cash Withdrawal Charges: After exceeding the free transaction limit, customers will be charged ₹19 per cash withdrawal, up from ₹17.
- Non-Financial Transaction Fees: The charge for non-financial transactions (such as checking account balances) has increased from ₹6 to ₹7 per transaction.
Why Do ATM Charges Matter?
ATM fees are a key source of revenue for banks. These fees help banks cover the expenses of maintaining ATMs, providing cash, and offering services to customers of other banks. However, while SBI has managed to turn ATM fees into substantial profits, other PSBs are struggling due to higher operational costs and fewer profitable transactions.
Conclusion
The financial data shared by the government highlights a significant disparity in ATM-related earnings between SBI and other PSBs. While SBI has leveraged ATM fees to boost its profits, many other public sector banks continue to incur losses. The recent increase in ATM charges may help struggling banks recover some of their losses, but it could also impact customers who rely on ATM services for their cash needs.
