Due to the inflating cost of security and maintenance Indian Bank Association (IBA) has made presentation requesting Reserve Bank of India (RBI) to restrict the number of free usage of the ATM (Automated Teller Machine). Currently 5 free transactions are allowed at other Bank ATMs and unlimited free transactions are allowed from own bank ATM. This will be reduced to 3 from November this year but only in the 6 metropolitan cities. In addition, the bank can levy charges on the use of own bank ATM beyond 5 transactions (including monetary as well as non-monetary).
New ATM Usage Rules
Other Bank ATM Usage:
- Number of Free Transactions for Savings Bank Account Holders at other bank ATMs will be reduced from 5 to 3 per month.
- The restrictions are applicable only on the ATMs located at Mumbai, New Delhi, Chennai, Kolkata, Hyderabad and Bengaluru.
- Number of free transactions will be 5 at the ATMs located other than the above cities.
- Banks at its own discretion increase the number of free transactions at the other bank ATMs.
- The above change will come in effect from 1st November, 2014.
- The new ATM usage rule will not be applicable on the small/no frill/ basic savings bank deposit account (BSBDA) holders.
- Number of free ATM transaction from small savings bank account holders will still be 5.
- Small/no frill/ basic savings bank deposit account means account having ‘nil’ or very low minimum balance criteria
- These accounts come with restrictions such as cap on total deposits, maximum balance and number of transactions.
Own Bank ATMs
- Banks are instructed to allow 5 free transactions per month including monetary and non-monetary at own ATMs.
- Beyond 5 transactions banks can levy charges and service tax, if any.
- Banks can fix the charges leviable on the transaction beyond free transaction.
- Maximum chargeable amount cannot exceed from Rs.20 plus applicable taxes per transaction.
RBI has directed Banks to clearly indicate the location of ATM as metro and non-metro and also to send alert about the number of free transactions already utilized during the month.