RBI limits free use of third-party ATMs

Last Updated: Friday, August 21, 2009 - 20:12

Mumbai: The Reserve Bank, which made third party ATM transactions free from April, has said not more than Rs 10,000 can be withdrawn each time they are used and limited the number of such transactions to five a month.

The apex bank has sent a communication in this regard to
Indian Banks` Association (IBA) and this is expected to be
implemented shortly, IBA Chairman K Ramakrishnan said.

"The Reserve Bank has agreed to put a cap of Rs 10,000
per withdrawal in such (third party) transactions. Also, the
number of such transactions will be limited to five times a
month," Ramakrishnan said.

IBA, which is the industry lobby of Indian banks, had
submitted its recommendations to the central bank last month
citing the financial burden faced by banks on account of huge
number of third party usage and small-ticket withdrawals.

Since April 1, RBI had declared third party ATM usage,
including cash withdrawals and account enquiries, free for all
customers and said that banks can charge Rs 18-20 per month
from other banks in case of third party ATM transaction.

With the number of third party transactions surging
post-April, banks approached the Reserve Bank through IBA to
revisit the current norms and make necessary modifications.

RBI Executive Director, G Gopalakrishna told reporters
here on the sidelines of a summit that the Reserve Bank has
received suggestions from IBA on the matter, which has been
examined by the central bank.

Though IBA had also recommended a minimum limit of Rs
1,000 on third party ATM withdrawals, this was rejected by the
Reserve Bank to protect the interest of small withdrawer.

Bureau Report



First Published: Friday, August 21, 2009 - 20:12

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