Inter-bank ATM usage becomes free from today
The Reserve Bank of India’s (RBI) directive to render charge-free for customers, the usage of automated teller machine (ATM), comes into effect on Wednesday.india Updated: Mar 31, 2009 22:16 IST
The Reserve Bank of India’s (RBI) directive to render charge-free for customers, the usage of automated teller machine (ATM), comes into effect on Wednesday.
According to the directive a customer can withdraw money from his bank account using the ATM of any other bank, at no cost. The charges would be borne by the banks.
Despite this, banks have shown no trend of slowing down ATM deployment. “The directive would get more end customers to ATMs. So if a person was using an ATM about thrice a month, the usage will only increase as there is no charge,” said Pradeep Sen, managing director of NCR Corp — which makes ATM machines — in India.
“I can see two scenarios where banks can turn this situation to their advantage. The bigger banks can deploy more ATMs thereby ensuring a steady flow of customers and the smaller banks, on a tight infrastructure budget can take advantage by riding on other banks’ ATMs and paying the charge,” said Sen.
Banks such as Axis Bank and State Bank of India have already begun deployment of more ATMs. Axis is set to put out 400 ATMs, while SBI, after its expansion, would have a 12,000-strong ATM network.
Union Bank of India is looking at adding 500 ATMs to its network to take advantage of the directive. “We were the first bank to give this service even when others have been charging their customers for using other ATMs,” said M V Nair, chairman and managing director of Union Bank.