Home >Opinion >Online-views >RBI puts cap on all transactions at other bank’s ATM

Are you in the habit of withdrawing small amounts every time you visit an ATM, leading to multiple visits in a month? Do you check your savings account balance every time you step into an ATM? If your answer is yes, this would add to your banking costs if you do not stick to your own bank’s ATM.

Effective 1 July, according to a Reserve Bank of India (RBI) notification, you can check your account balance at another bank’s ATM free of cost only five times in a month. Moreover, the total number of cash withdrawals and balance enquiry transaction together should not exceed the limit of five, beyond which you will have to pay a charge.

What’s the change

While RBI permitted cash withdrawals free of cost five times a month till now, you could check your balance as many times as you wished in another bank without paying a fee.

The “free ATM access policy" first came into being on 1 April 2009, when RBI said that any number of transactions would be free. However, soon after, it put a cap on cash withdrawals.

But that has changed now. Now your total number of free transactions, including cash withdrawal and balance enquiry, can’t exceed five.

Another important thing to note is the limit of five includes multiple transactions during a single visit. So if in one visit you check your balance as well as withdraw some cash, you will have only three free transactions left for the month.

What’s the charge

After you have made five transactions, the sixth will carry a charge-about 9 for balance enquiry and close to 20 for withdrawing cash.

What’s in store

In future, you may have to be even more careful about the number of times you are using another bank’s ATM. Says Madanjit Singh, general manager, Punjab National Bank, “Banks are contemplating including other non-financial transactions in this overall free limit of five. This may include PIN change and mini statement, among others."

RBI’s rationale

“Though the customer was not charged anything for balance enquiry at other banks’ ATMs, the bank (with which the customer has an account) incurs a cost for the same. Hence, the apex bank may have thought of limiting the facility so that customers use the facility judiciously," says Singh.

However, the banking regulator has not spelt out any specific reason behind the latest move.

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