From Oct 15, only 5 ‘other bank ATM’ transactions a month

Bank customers will soon realise the stark reality; there is no free lunch in the business of banking.

After allowing customers to enjoy free, no-holds-barred access to ATMs of all banks for over four months, banks have realised that such a facility should be restricted to prevent its “misuse”.

The restriction on free access to non-home bank ATMs will kick in from October 15, and bank customers are not going to like it one bit.

The Reserve Bank of India has acquiesced to the Indian Banks’ Association’s request to allow savings bank customers only five free transactions at non-home bank ATMs in a month.

Now, if a customer chooses to use a non-home bank ATM to withdraw cash or make balance enquiry more than five times a month, there will be a debit ranging from Rs 12 to Rs 20 from his/her savings bank account. This debit will go to reimburse the bank whose ATM has been used.

Savings bank customers will be subject to a withdrawal ceiling of Rs 10,000 a transaction at non-home bank ATMs.

Further, current account holders will not be allowed to use ATMs as they enjoy electronic payment facilities such as Real Time Gross Settlement and National Electronic Funds Transfer.

“We have agreed to the IBA’s proposal which limits the number of transactions at non-home bank ATMs,” said Ms Alpana Killawala, Chief General Manager, Department of Communication, RBI.

Mr K. Unnikrishnan, Deputy Chief Executive, IBA, emphasised that individual banks have the discretion to offer their customers free-of-cost ATM access at other bank ATMs. “The broad contours of ATM transactions at other bank ATMs have been drawn up as per RBI guidelines. If individual banks want to continue to offer unrestricted free ATM access to their customers at other bank ATMs, then the discretion is entirely theirs.”

A study by the Association shows that the average cash withdrawal per transaction from ATMs is Rs 3,500 and that 90 per cent of the transactions were under Rs 10,000. Free access to customers at other bank ATMs has led to a sharp spurt in the number of transactions, small cash withdrawals (of even Rs 100), frequent balance enquiries, ATMs often running out of cash as some banks allowed cash withdrawals up to Rs 75,000 in each transaction, and misuse of the facility by current account customers.

Source: BusinessLine

10 thoughts on “From Oct 15, only 5 ‘other bank ATM’ transactions a month

  1. this is good but i think you need to be more specific about the amount of losses the banks facing due to the with drawl of money & cash inquiry.if you can do so then please mail me ….


  2. how is the month calculated for the transactions on non home ATM’s.
    is it by 1st to 30th in every month or a period between 5 transactions.

    I have used non home ATM on 14 th of this month for Balance enquiry and transacting money. I think 2 times were over. But will it ends for 30th of this month or till 14th of next month, I have only 3 transactions remain.

    Please suggest


  3. If the usage of ATMs is popularised, the costs to a bank for operating the ATM are offset by the direct and indirect benefits gained by the bank. The usage of a particular bank’s ATM indicates it’s convenience in a certain area vice other bank’s ATMs. The only variable cost to the bank is to load cash in the ATM at certain intervals, as they would have the statistical records of the usage. With the introduction of the concept of interchange, the banks should adjust and absorb the variable costs in the larger interests of their customers and the customers of other banks. If the RBI accedes to the lobbying of the IBA, their decision would lead to unhealthy competition amongst banks. The RBI should consider the interests of the public, like the risks in carrying and holding cash, emergency expenses, etc. which far outweighs the “no free lunch” being advocated by the IBA.


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