Home »  Money

Free usage of cross-bank ATMs reduced to 3 from 5

Friday, 15 August 2014 - 7:05am IST | Place: Mumbai | Agency: dna

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.

At present, the rules are applicable only in six metro cities of Mumbai, New Delhi, Chennai, Kolkata, Bangalore and Hyderabad. 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.

"The ATM business is profitable for us but going forward when we will have to beef up security features at the ATMS, we will still have to stay profitable so the reduction in free usage is necessary," Arun Tiwary, chairman and managing director of Union Bank of India (UBI).

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

SBI and five associate banks together have the largest ATM network of 53,107 ATMs.

Union Bank of India is planning to install 458 ATMs as against 200 branches during the financial year. For every 100 branches, the bank has 167 ATMs.

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.

Jump to comments

Recommended Content