If you are a debit card user and use ATMSs frequently or even if withdraw money using credit cards, here is some good news from the Reserve Bank of India (RBI).
On Wednesday, the RBI issued circular directing banks to exclude non-cash withdrawal transactions at the ATM, including fund transfers, as well as failed transactions from the five free transactions per month that banks have to mandatorily provide to their savings bank account holders.
It is to be noted here that banks offers five free ATM transactions in a month if the ATM is in its own network.
While, for ATM transactions done on other bank’s network, banks provide less number of free transactions and also charge a fee of up to Rs 20 plus GST on each transaction beyond the free transaction limit.
The circular is applicable to all scheduled commercial banks, cooperative and rural banks.
The circular added that “It is hereby clarified that transactions which fail on account of technical reasons like hardware, software, communication issues; non-availability of cash in the ATM; and any other reason attributable to the bank should not be counted as valid ATM transactions for the customer.”
Hence, no charges shall be levied on such transactions. The apex bank added that some banks were hitherto including such transactions among the mandatory free ones.
Further, non-cash withdrawal transactions such as balance enquiry, placing a cheque book request, payment of taxes, funds transfer, which constitute ‘on-us’ transactions (when a card is used at an ATM of the bank which has issued the card) can no longer be part of the number of free ATM transactions.
Different banks impose different fees for the usage of other bank ATMs, beyond the mandatory free transactions prescribed.
For example, SBI charges Rs 17, including tax of financial transactions, and Rs 6 for non-financial transactions.
Likewise, ICICI Bank charges Rs 20 plus GST per cash withdrawal at other banks’ ATMs and Rs 8 plus GST for balance inquiry.
It has been seen that ATM cash withdrawals fail due to network failure or non-availability of cash in the ATM and the customers are forced to do another transaction at the same ATM or look for other ATMs to complete their transaction.
Due to this, they exhaust their free transaction limit quickly and pay a fee for rest of the ATM transactions beyond the free limit.