Although free third party ATM withdrawals were announced with much fanfare in April 2009, some restrictions are coming on such transactions from 15th October 2009. Read on for more details.
| In April 2009, the Reserve Bank of India made third party ATM usage free. This was true for both withdrawals and balance enquiries. (Check out “Free cash withdrawals from all ATMs in India from 1 April 2009” for more) |
That is going to change from October 15, 2009.
The background
The April directive by the Reserve Bank of India (RBI) stated that transactions on ATMs owned by banks where you did not have an account (third-party ATMs) were free.
That is, any number of withdrawals – for any amount – were totally free for customers. Account balance checks were free too.
The restrictions
Now, at the insistence of banks, and following the recommendations of the Indian Banks’ Association (IBA), there are some restrictions coming in.
Starting October 15th, there would be a cap on the free transactions. You would be:
- Allowed only 5 free transactions in a month. Subsequent transactions would be charged (the proposed rate is Rs. 20 per transaction)
- Allowed to withdraw a maximum of Rs. 10,000 while using the ATM of a third-party ATM
Also, this facility would be available on to savings account holders, and not to current account holders.
Some exceptions
Of course, the banks would be allowed to be more liberal than this.
Thus, for example, a bank can choose to offer unlimited free third party ATM withdrawals to its “premium” customers.
The reason behind this change
When you withdraw money from a third-party ATM, you bank has to pay some amount (around Rs. 18 to Rs. 20) to the other bank for the use of its ATM. Therefore, the banks have been insisting on limiting these transactions to a reasonable number.
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