Free Use Of Other Banks ATM May Be Stopped

Are the ATM system reforms, which allow cash withdrawal from any bank’s teller machines without extra charges, short-lived?

A fortnight ago, the RBI agreed to three Indian Banks’ Association (IBA) proposals on third-party ATM use.

First, customers can withdraw up to Rs 10,000 per transaction at ATMs of other banks.

Second, they can make up to five free of-cost transactions per month. In other words, beyond the limit, it is likely that a customer’s account may stand debited to the extent of the interchange fee, which is normally about Rs 20 per transaction.

Finally, free ATM service will be extended only to savings account holders.

RBI spokesperson Alpana Killawala says, “Indian Banks’ Association has been advised that banks can go ahead with the changes provided they introduce them in a transparent manner and put up notices at ATM centres.’’

Consumer bodies, though, say the restrictions have come in too soon after the freeing of ATMs. Sri Ram Khanna of Delhi’s Consumer Voice says, “Once you’ve given some service to a customer, taking it away is not justified. Banks could reduce the interbank transaction fee instead. They are, in any case, reducing their cost by preventing people from visiting their branches. Besides, free ATMs is not a value-added service. It’s a basic function.’’