ATM charges needed to pay for security: Banks

The proposal to restrict free ATM transactions to five every month, including those at the ATM of an account-holder's bank, has arisen following the mandatory security requirement at ATMs.

Bankers say maintaining an ATM involves huge costs, like rentals, costs of security, and costs to be paid to the outsourced agency to load cash.

"If banks have to be in black, there will have to be some charge on ATM transactions beyond a minimum number," says Ashwini Mehra, chief general manager, State Bank of India.

The demand for mandatory security at all ATMs follows the brutal attack on a lady at a Corporation Bank ATM in Bangalore last year.

Banks have estimated an expenditure of Rs40,000 per month, per ATM, just for security.  The Indian Banks Association (IBA), thus came out with a proposal to limit free ATM transactions.
Currently most banks do not charge account holders if they use the bank's own ATM. Moreover, RBI requires every bank to allow its customers access to third-party ATMs at least five times a month without additional charge.

"The RBI has to give the nod for this. We are waiting and watching," says Mehra.

There are about 1.4 lakh ATMs across India, and the IBA expects another 60,000 to come up in six months time.Banks like SBI and Corporation Bank have 670 and 100 ATMs in Bangalore respectively.

And bankers have been saying that they have been "working towards providing security at every ATM."

According to Mehra, SBI has deployed 'caretakers' at all their ATMs, who will also "keep an eye on the ATM infrastructure."