Only 5 free withdrawals from other banks’ ATMs

The days of unlimited ATM usage are coming to an end. Under pressure from banks, the Reserve Bank of India (RBI) has gone back on its circular allowing unlimited cash withdrawal from any ATM across India. From October, customers will be allowed only five transactions per month from ATMs other than their own bank.

Cash withdrawals from another bank’s ATM have also been capped at Rs10,000 per transaction, an RBI spokesperson confirmed. The RBI decision follows a representation by the Indian Banks Association (IBA) against unlimited ATM usage in July.

IBA, which is the representative organisation of banks in India, had proposed the caps in July and it got the go-ahead from the RBI in the first week of August, IBA chief executive Dr K Ramakrishnan said.

“Lots of banks complained that other customers used their ATMs more than their own. A cap of five transactions on third-party ATMs is fair because customers do not go and withdraw cash everyday. Banks had to incur huge costs because of these unlimited withdrawals. This will be fair for both banks and customers. We expect to make these caps effective from October 15,” he said.

Bankers complained that customers used third-party ATMs even to withdraw a few hundred rupees, which created a stress on the network as well as increased their daily costs. They expect customers to use ATMs more sparingly once this directive comes into effect. There are more than 40,000 ATMs in India, more than 14,000 of which are owned by the State Bank of India.