Current Affairs

RBI Rules: Only 3 Free Transactions at other ATM Banks

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 earlier five. Any additional usage will attract a maximum levy of Rs 20.

 

The RBI also allowed banks to levy ATM charges beyond five transactions for the same bank’s account holders. On the other hand, banks are free to offer free transactions over and above the central bank’s limit.

The rules are, however, not applicable to customers having basic or small savings bank accounts.

For long, banks have been crying hoarse on free ATM usage. They argued that if ATM usage charges are not levied, it will be a loss-making business.

According to RBI, the number of ATMs has increased to 160,000 by March-end from 27,000 seven years ago.

After a few instances of crime at ATMs, banks were forced to improve security features at their teller machines. They were clamouring for a rise in ATM charges after various state governments decided to improve the security at ATMs and have electronic surveillance in the form of CCTVs, especially after a woman was brutally attacked at an unguarded ATM in Bangalore last year. Banks under the aegis of the Indian Banks’ Association (IBA) had said that the additional security features will cost the banking system about Rs 400 crore.

IBA was demanding an increase in ATM charges from Rs 15 to Rs18 when other bank customers use the ATMs.

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