Reserve Bank of India (RBI) had issued a notification in August 2014 regarding ‘rationalization of number of FREE transactions at bank ATMs.” As per this notification, 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.
This is inclusive of both financial and non-financial transactions done at the ATMs located in the six metro centers. The metro cities are Mumbai, New Delhi, Chennai, Kolkata, Bengaluru and Hyderabad.
RBI has also allowed banks to levy ATM transaction charges of Rs 20/- per ATM transaction. This is the maximum limit that banks can charge. While some banks have already started charging their customers and few others will soon levy the ATM usage charges.
(Financial Transactions can be cash withdrawal (or) payments. Non-Financial transactions can be Balance Enquiry, change of ATM PIN, Fixed Deposit booking, mini statement etc.,)
This decision of RBI’s to allow banks to charge their customers on ATM usage has drawn widespread debate and criticism from consumers.
Let us try to know – How many free cash withdrawals are allowed now? What are the ATM transaction charges beyond the free limit? What about the ATM charges in non-metro locations? How to avoid or minimize the ATM usage charges?
ATM Transaction Charges of Top Banks in India
The below table gives you idea about the number of maximum free ATM transactions allowed at home and other Bank ATMs. I have also tried to provide information on ATM transaction charges beyond the FREE limit.
- The above limit of 3 free ATM transactions are for Metro cities only. The limit for all other locations is Five
- This reduction of free usage limit will not apply to small/no-frills savings account
- As per RBI, banks are free to offer more number of free transactions per month if they desire so. So, banks can provide some offers related to ATM usage on specific accounts (like privilege or corporate accounts)
Bank Specific offers / terms & conditions
- ICICI Bank charges are effective from 01-Jan-2015. ATM transaction charges are not applicable for certain type of saving accounts like Silver,Freedom and Privilege Sr Citizens Savings accounts .
- Axis Bank Salary account holders can get 10 free ATM transactions at home bank ATMs and 5 free transactions at non-Axis bank ATMs
- There is no restriction on free usage at SBI ATMs for its customers who maintain Average monthly balance (AMB) of more than Rs 25,000. No charges are applicable for cusotmers who maintain AMB of Rs 1 Lakh
- Charges at Kotak bank are applicable with effective from 01-Jan-2015
- IDBI bank has not put any restrictions on ATM card usage at home bank ATMs for all its savings account holders
Tips to avoid ATM usage charges
Even-though we have so many alternate payment or electronic systems available, the ATM still remains the most important channel through which we withdraw cash. The change in ATM transaction charges from zero to Rs 20 at one go is a very steep increase. It sounds absurd to pay for withdrawing your own money atleast from home bank ATMs.
Below are some effective tips to avoid any excess ATM transaction charges :
- You can consider not to execute non-financial transactions at ATMs. You may use alternate channels like Phone banking / mobile banking for performing Non-Financial transactions like balance enquiry, mini statement, PIN change etc.,
- Try to reduce your dependence on cash. Streamline your utility bill payments. Pay them online.
- Instead of paying in cash, swipe your ATM or debit card at merchant outlets that offer card readers (Point of sale payment systems).
- I believe almost all the top banks have their mobile banking applications. Download you bank’s app and use it for all the possible transactions.
- Try to use the net banking facility and be aware of all the features offered by your bank
Always remember the golden saying, ‘A Penny saved is a penny earned.’ Do you think banks are right in levying ATM transaction charges? Do share your comments. Cheers!
( Download RBI notification on ATM transaction charges )(Image courtesy of adamr at FreeDigitalPhotos.net)