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Business News/ Industry / RBI curbs free usage of cross-bank ATMs
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RBI curbs free usage of cross-bank ATMs

The RBI also allowed banks to levy ATM charges beyond 5 transactions for the same bank's account holders

The reduction will not be applicable to customers having basic or small savings bank accounts as well as for ATMs located outside Mumbai, New Delhi, Chennai, Kolkata, Bengaluru and Hyderabad. Photo: Hemant Mishra/MintPremium
The reduction will not be applicable to customers having basic or small savings bank accounts as well as for ATMs located outside Mumbai, New Delhi, Chennai, Kolkata, Bengaluru and Hyderabad. Photo: Hemant Mishra/Mint

Mumbai: The Reserve Bank of India (RBI) has reduced the number of free transactions at automated teller machines (ATMs) of banks other than a customer’s own bank to three a month from the five permitted earlier. The central bank said on Thursday that the new limit will first apply to the six metro cities—Mumbai, Delhi, Chennai, Kolkata, Bangalore and Hyderabad.

The number of cash machines in India rose to 160,000 at the end of March, from 27,000 seven years earlier, RBI said in its notification on its website. The so-called point-of-sale infrastructure has increased from 320,000 to over one million terminals in that period. Considering the growth in cash access points and associated cost for banks and the overall economy in setting up infrastructure for payment systems, RBI said that it has decided to revise the number of free transactions available for customers. Banks are free to offer free transactions over and above the central bank’s limit.

The RBI also said banks may offer five free transactions when their savings bank customers use their own ATMs. Lenders may choose to levy a charge of up to Rs20 per transaction after that. “Given that different banks may adopt different pro-customer policies with respect to ATM usage, and with a view to minimising customer grievances, banks have also been advised to put in place a mechanism to make customers aware of the location-status of the ATM (metro/non-metro) and also the fact that the transaction may attract charges," RBI said. Banks have also been advised to put in place a mechanism where they can alert their customers about the free transactions used for the month.

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Published: 14 Aug 2014, 07:29 PM IST
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