RBI on 10-10-2014 has further clarified that prior to the issuance of the latest instructions, banks were mandated not to charge any fees to their savings bank account customers for five ATM transactions (inclusive of both financial and non-financial) in a month carried out at other bank ATMs irrespective of the location of the ATMs. With the issuance of the latest instructions while this overall cap remains unchanged, THREE transactions (inclusive of both financial and non-financial) would be free of charge if carried out at other bank ATMs located in six metro centres,viz., Mumbai, New Delhi, Chennai, Kolkata, Bengaluru and Hyderabad. Accordingly, if transactions are carried out at both the six metro centres and other locations, the total number of transactions (inclusive of both financial and non-financial) free of charge at other bank ATMs would continue to remain at FIVE. Banks are, however, free to offer more number of free transactions per month at other bank ATMs as well as own ATMs in any geographical location. Banks are also free to decide on the combination (for metro & non-metro locations) of free transactions while adhering to the minimum requirements.
It has been further clarified that the applicability of free transactions (inclusive of both financial and non-financial) at other bank ATMs to small / no frills / basic savings deposit account holders as per circular dated August 14, 2014 is subject to the RBI Master Circular (on Customer Service in Banks) RBI/2014-15/72 DBOD No. Leg.BC.21/09.07.006/2014-15 dated July 1, 2014 Download Circular Click Here >>
Previously, Reserve Bank of India, acting on the representations of banks and Indian Banks Association (IBA) which had approached it seeking changes in the instructions regarding free transactions at other banks’ ATMs. Referring to the growing cost of ATM deployment and maintenance incurred by banks on the one hand as well as the rising interchange out-go due to these free transactions, the IBA had sought the removal of free transactions at other banks’ ATMs at metro centres and other large townships in the country.
RBI has observed that the number of Automated Teller Machines (ATMs) has increased from 27,000 in 2007 to over 1.6 lakh by the end of March 2014. Also in the period, the Point-of-Sale (POS) infrastructure has increased from 3.2 lakh to 10.65 lakh terminals. However The apex bank admitted that despite this growth, the deployment of both ATMs as well as POS infrastructure in the country is lop-sided with a significantly large presence in metropolitan and urban areas as compared to rural and semi-urban areas.
The existing instructions of RBI state that five free transactions per month (inclusive of financial and non-financial transactions) is permitted at other bank ATMs. However after considering the ATM deployment in the country as well as availability of alternate means of electronic payment infrastructure and access thereto, existing directions of RBI on free usage of other banks of ATM has been revised by circular dated 14-08-2014 as under:
1.
Taking into account the high density of ATMs, bank branches and alternate modes of payment available to the customers, the number of mandatory free ATM transactions for savings bank account customers at other banks’ ATMs is reduced from the
present five to three transactions per month
(inclusive of both financial and non-financial transactions) for transactions done at the ATMs located in the six metro centres, viz. Mumbai, New Delhi, Chennai, Kolkata, Bengaluru and Hyderabad. Nothing, however, precludes a bank from offering more than three free transactions at other bank ATMs to its account holders if it so desires.
2.
This reduction will, however, not apply to small / no frills / Basic Savings Bank Deposit account holders who will continue to enjoy five free transactions, as hitherto.
3.
At other locations i.e. other than the six metro centres mentioned above, the present facility of five free transactions for savings bank account customers shall remain unchanged.
4.
ATM installing banks are advised to indicate clearly at each ATM location thatthe ATM is situated in a ‘metro’ or ‘non-metro’ location using appropriate means (message displayed on the ATM / sticker / poster, etc.) to enable the customer to identify the status of the ATM in relation to availability of number of free transactions. Further, banks are advised to ensure the “ATM location identifiers” in their ATM database is accurate and kept up-to-date at all times so as to minimise disputes, if any, in the matter.
5.
The issuing banks are also advised to put in place proper mechanisms to track such transactions and ensure that no customer in convenience or complaints arise on this account.
6.
The provisions related to levy of charges for use of
own-bank ATMs
, vide our circular dated March 10, 2008, has also been reviewed. Accordingly, banks are advised that at least five free transactions (inclusive of financial and non financial transactions) per month should be permitted to the savings bank account customers for use of own bank ATMs at all locations. Beyond this, banks may put in place appropriate Board approved policy relating to charges for customers for use of own bank ATMs.
7.
The ceiling / cap on customer charges of
Rs.20/- per transaction (plus service tax, if any) will be applicable
.
8.
Banks are advised to ensure that the charges structure on ATM transactions, as per their Board approved policy, is informed to the customer in a fair and transparent manner.
9.
Further,banks are advised to put in place suitable mechanism for cautioning / advising/ alerting the customers about the number of free transactions (OFF-US as wellas ON-US) already utilised during the month by the customer and the possibility that charges may be levied as per the banks’ policy on charges.
Download RBI Circular Click Here >>
