RBI puts Rs10,000 cap per withdrawal from third party ATMs

RBI puts Rs10,000 cap per withdrawal from third party ATMs

Mumbai: The Reserve Bank, which made third party ATM transactions free from April, has said not more than Rs10,000 can be withdrawn each time they are used and limited the number of such transactions to five a month.

The apex bank has sent a communication in this regard to Indian Banks’ Association (IBA) and this is expected to be implemented shortly, IBA chairman K Ramakrishnan told PTI.

“The Reserve Bank has agreed to put a cap of Rs10,000 per withdrawal in such (third party) transactions. Also, the number of such transactions will be limited to five times a month," Ramakrishnan said.

IBA, which is the industry lobby of Indian banks, had submitted its recommendations to the central bank last month citing the financial burden faced by banks on account of huge number of third party usage and small-ticket withdrawals.

Since 1 April, RBI had declared third party ATM usage, including cash withdrawals and account enquiries, free for all customers and said that banks can charge Rs18-20 per month from other banks in case of third party ATM transaction.

With the number of third party transactions surging post-April, banks approached the Reserve Bank through IBA to revisit the current norms and make necessary modifications.

RBI executive director, G Gopalakrishna told reporters here on the sidelines of a summit that the Reserve Bank has received suggestions from IBA on the matter, which has been examined by the central bank.

Though IBA had also recommended a minimum limit of Rs1,000 on third party ATM withdrawals, this was rejected by the Reserve Bank to protect the interest of small withdrawer.