Unlimited free usage of third party ATMs by account holders is likely to end soon. The Reserve Bank of India (RBI) has seen reason in the banks' demand for putting restrictions on cash withdrawals from third party ATMs.
“Though no guideline has been issued yet, the RBI is considering IBA’s proposal to limit the number of ATM (cash) transactions to five per month and (restrict to) Rs 10,000 per withdrawal,” said G Gopalakrishna, executive director, RBI, on the sidelines of a seminar on financial inclusion on Friday.
RBI had freed usage of all ATMs by account holders from April 1, 2009 after it found banks charging unfairly high fees per transaction if the customer of one bank used the ATM of another bank, as high as Rs 55 per transaction in
Though the ATM usage was made free for customers, the bank is required to pay a charge of Rs 18-20 per transaction to the bank that owns the ATM.
The Indian Banks’ Association (IBA) petitioned RBI last month as the ATM usage had become skewed, and banks with a large customer base were ending up having to bear the brunt of these charges.
The IBA asked RBI to cap third-party ATM usage at Rs 10,000 per day, limiting such transactions to five per month.