New rules for ATM

ATM Transactions:

                 Many people have a habit of withdrawing small amounts of money from the ATM

to curb spending tendencies, but often end up with a high frequency of withdrawals. There

are some others who are reluctant to use net banking or mobile banking facilities and

depend on ATMs for checking account balance. If you happen to fall into any of these

categories, it’s time to change your habit for good as RBI has issued new rules and

guidelines limiting the number of times you use your ATM in a month. The new ATM

transaction rules issued by the Reserve Bank of India is applicable to all ATM transactions

including withdrawing cash, checking account balance or getting a mini account

statement.

New RBI ATM Transaction Rules:

                    According to the new RBI guidelines that come into effect from 1st November

2014, savings bank account holders in metropolitan cities would be allowed only three

transactions from ATMs of other banks and five from the same bank in a month. For any

ATM transaction above the stipulated limit, a transaction fee of Rs. 20 would be charged to

the account holder. The new transaction fee is applicable only for people living in six

metropolitan cities including Mumbai, Delhi, Bengaluru, Chennai, Hyderabad and Kolkata.

People living in smaller towns and other centers would continue to enjoy five free monthly

transactions per month from the ATM of other banks and the charges for them include Rs.

20 for each cash withdrawal and Rs 9 for non-cash transactions. Account holders of zero

balance and other no-frills accounts in non metros are exempted from such transaction

charges as of now.

What new Rules Mean for Bank Customers:

                  The transaction fee has been increased from the earlier limit of Rs. 15 and the

number of free transactions decreased from five to three for ATMs of other banks. Another

important change in the new RBI guideline policy for ATM transaction fee is the fact that all

ATM transactions including cash withdrawal, balance enquiry and changing of PIN number

etc would be considered as an ATM transaction unlike in the past when balance enquiry

was not considered a transaction as such!

A Case for Capping ATM Transaction Limit:

                   While capping the charges for ATM usage may be an unpopular decision taken

by the Reserve Bank of India, the limit in free transactions is justified by the apex body

considering high expenses for managing ATMs across the country. With an increasing

number of robbery attempts on various ATMs especially in isolated areas and in semi

urban and rural areas, the banks have been forced to shell out funds to install a security

mechanism apart from using CCTVs and manual security guards wherever possible.    more >>