Now only 3 transactions per month from ATMs of other Banks
The Reserve Bank of India (RBI) has allowed Banks to set a limit on free ATM transactions customers can do at ATMs of rival lenders. Now customers of a bank can make only three free transactions per month from the ATMs of rival banks. The banks are also allowed to set a limit on the number of free transactions at their own ATMs at five. The central bank has also permitted banks to charge up to Rs 20 for every transaction beyond the limit.
New charges will apply for transactions at ATMs located in six metro centres — Mumbai, New Delhi, Chennai, Kolkata, Bengaluru and Hyderabad.
The move is aimed at rectifying the skewed development of ATMs in the country. Banks continued to set up ATMs in cities despite high level of concentration, as these could be used to cross-subsidize other products. However, there was a disinclination to expand the network in rural areas. The move by RBI would bring down the number of transactions in metros and could lead to some level of consolidation.
However, this reduction will not apply to customers having no-frills, small or Basic Savings Bank Deposit Account (BSBDA) type of accounts as well as for transactions carried out by account holders at ATMs situated outside these six metros. Banks are also allowed to provide free transactions above the mandated limit.
The number of automated teller machines (ATMs), which stood at a little over 27,000 as at end-March 2007, has increased to over 1.6 lakh across the country by end-March 2014.
Categories: Business, Economy & Banking