Be ready to pay if your ATM withdrawals exceed five a month

You may have to pay up to Rs.20 for every ATM  withdrawal if the number of such transactions from your own bank exceeds five a month, the Reserve Bank of India (RBI) said Thursday.

For transactions from the ATMs of other banks, the allowance of  free withdrawal is three times, as opposed to five times now, after  which one may have to pay a fee.

"Taking into account the scope for cross-subsidisation and with a view  to ensuring more transparency in pricing of such transactions, banks  have been advised to provide their savings bank account holders with at  least five free transactions per month at their own ATM," the apex bank  said.

This will apply for transactions done at ATMs located in the six metro  centres, namely, Mumbai, New Delhi, Chennai, Kolkata, Bangalore and  Hyderabad which are well-served in terms of payment infrastructure.

This reduction will not apply to customers with no-frills, small or  basic savings accounts, as also for transactions at ATMs outside the six  metro centres.

Banks can also offer free transactions above the mandated limit.

"The number of mandated free transactions for savings bank account  holders at other bank ATMs has been reduced from five to three per  month."

The central bank said the step was taken since access to ATMs had vastly  improved in the six metro cities, even as there were costs associated  with providing such facilities.

Another objective was to move away from micro-management of business  decision taken by banks while protecting the interests of the weaker  sections of the society.

As per data provided by the central bank, the number of ATMs had  increased from 27,000 as at end-March 2007 to over 160,000 across the  country by end-March 2014.

The point-of-sale infrastructure, or loosely a bank office serving  customers and equipped with a computer, increased from 320,000 to nearly  1.1 million during this perios.

"It is, however, observed that the development of other payment  mechanisms and related infrastructure is more visible in metro areas in  the country."

According to a banking official, it was already costing banks Rs.15 per  ATM transaction. A burden of another Rs.5 was added after they were  asked to post a security guards outside ATM booths after a spate of  daring robberies.

The Reserve Bank said banks were free to adopt pro-customer policy on  ATM usage. But to minimise hardship, banks had to make customers aware  of the location-status of the ATM  and the charges.

"Banks have also been asked to put in place mechanisms to advise, alert  customers regarding the number of free transactions availed during the  month by him/her."