Consumer Blog

ATM withdrawal is going to be completely free from 1st April 2009! In case you missed out, RBI had one year back announced it that from 1st April 2009, using ATM is going completey free!

Till now, if you have an ATM of X Bank, you could not withdraw money from other bank than X Bank, if you did, you were charged anything from Rs. 25 to Rs. 75/- depending on bank to bank! So if you were withdrawing some Rs. 200 only from other bank than yours, you were paying more than 10% of your withdrawal amount!

But RBI has doen away with it and now you can withdraw any amount from any ATM, totally free! You can even check your bank balance!

Here is the RBI Notice.

Date: Mar 10, 2008

Customer charges for use of ATMs for cash withdrawal and balance enquiry

RBI/2007-2008/ 260
DPSS No.1405 / 02.10.02 / 2007-2008

March 10, 2008

The Chairman / Chief Executive Officer
(All Scheduled commercial banks including RRBs)

Dear Sir

Customer charges for use of ATMs for cash withdrawal and balance enquiry

1. Automated Teller Machines (ATMs) have gained prominence as a delivery
channel for banking transactions in India. Banks have been deploying ATMs
to increase their reach. While ATMs facilitate a variety of banking
transactions for customers, their main utility has been for cash withdrawal
and balance enquiry. As at the end of December 2007, the number of ATMs
deployed in India was 32,342. Commensurate with the branch network, larger
banks have deployed more ATMs. Most banks prefer to deploy ATMs at
locations where they have a large customer base or expect considerable use.
To increase the usage of ATMs as a delivery channel, banks have also
entered into bilateral or multilateral arrangements with other banks to
have inter-bank ATM networks.

2. It is evident that the charges levied on the customers vary from bank to
bank and also vary according to the ATM network that is used for the
transaction. Consequently, a customer is not aware, before hand, of the
charges that will be levied for a particular ATM transaction, while using
an ATM of another bank. This generally discourages the customer from using
the ATMs of other banks. It is, therefore, essential to ensure greater
transparency.

3. International experience indicates that in countries such as UK, Germany
and France, bank customers have access to all ATMs in the country, free of
charge except when cash is withdrawn from white label ATMs or from ATMs
managed by non-bank entities. There is also a move, internationally, to
regulate the fee structure by the regulator from the public policy angle.
The ideal situation is that a customer should be able to access any ATM
installed in the country free of charge through an equitable cooperative
initiative by banks.

4. In view of this, RBI had placed on its website an Approach paper and
sought public comments. The comments received have been analysed. Based on
the feed back a framework of service charges would be implemented by all
banks as under:

Sr.No.
Service
Charges

(i)
For use of own ATMs for any purpose
Free (with immediate effect)

(2)
For use of other bank ATMs for balance enquiries
Free (with immediate effect)

(3)
For use of other bank ATMs for cash withdrawals
No bank shall increase the charges prevailing as on December 23, 2007
(i.e. the date of release of Approach Paper on RBI website)
Banks which are charging more than Rs.20 per transaction shall reduce the
charges to a maximum of Rs.20 per transaction by March 31, 2008
Free – with effect from April 1, 2009.

5. For the services at (1) and (2) above, the customer will not be levied
any charge under any other head and the service will be totally free.

6. For the service number (3) the charge of Rs.20/- indicated will be all
inclusive and no other charges will be levied to the customers under any
other head irrespective of the amount of withdrawal.

7. The service charges for the following types of cash withdrawal
transactions may be determined by the banks themselves:

(a) cash withdrawal with the use of credit cards
(b) cash withdrawal in an ATM located abroad.

8. Please acknowledge the receipt of the circular. A copy of the circular
issued to your branches on this subject may please be submitted to us in
due course.

Yours faithfully

(Arun Pasricha)
General Manager