As per a new RBI directive, from November 1, 2014 onwards, free ATM transactions will be limited to 5 at ATMs that belong to a customer’s own bank and to 3 at ATMs that belong to other banks. Earlier, customers enjoyed unlimited free usage of their own bank’s ATM and could transact using ATMs of other banks up to five times a month, free of charge. This included cash withdrawals, balance inquiry, change of PIN, mini statements, etc.
The new rule has been approved following a request made by Indian Banks Association (IBA) to reconsider the free ATM usage policy. The IBA had claimed that banks were incurring a loss of over Rs. 400 crore for expenditures on security at the ATMs. The increase in security that included guards and CCTVs was done after a spate of crimes in ATMs and the murder in an ATM at Bangalore. Along with security costs, banks also incur a charge every time a customer uses the ATM of another bank. The increase in the number of ATM transactions had seriously increased this outgo.
This proposal is currently applicable only for ATMs located in six metros (Delhi, Mumbai, Chennai, Bangalore, Kolkata and Hyderabad). ATM usage in rest of India would remain as it is.
1. The charges would not exceed Rs. 20, plus additional taxes.
2. Banks are free to increase the limit of free ATM usage for their customers.
3. The new rule is applicable only for account holders in these six metros using ATMs located in the metros.
4. Account holders of no-frills, small and Basic Savings Bank Deposit Account will continue to have free, unlimited access to their own bank’s ATMs and up to five free usage of ATMs of other banks.
5. Banks have been asked to specify at the ATM location itself whether the ATM is situated in a metro or not.
6. Banks have been asked to communicate this change in policy to their customers in a fair and transparent manner.
7. Banks have also been advised to inform the customers about the number of free transactions they have used and to alert the customers about the possibility of charges being incurred as per the bank’s policy.