Vidhyaa Sree Vidhyaa Sree is a freelancer/Content Writer and author of www.gogreenguyz.com

Restriction On Third Party ATM Withdrawals

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August 14 RBI Update:
RBI cuts free ATM transactions for saving account holders to 3 from 5.The new limit will first apply to the six metro cities—Mumbai, Delhi, Chennai, Kolkata, Bangalore and Hyderabad

Read more at: http://www.livemint.com/Politics/jeLqrvQokiVNy508ZDJVzI/RBI-curbs-free-usage-of-crossbank-ATMs.html?utm_source=copy

In a latest report, it was found that the numbers of ATM withdrawals from third party ATMs will come down to three per month. Currently, the limit is five withdrawals per month for the account holders. However, this is applicable only for the account holders present in cities. As far as, the instructions of Reserve Bank of India are concerned, the banks will have to continue offering the same limit to the account holders in rural areas. The banks will now have to provide details to the RBI regarding the numbers of machines that are present in villages.

 
Problems For City Customers:

This news certainly comes as a great source of disappointment for the city account holders. This is because if they do not have a home bank ATM available to them, and they have completed the limit of free withdrawal for two times, they will have to look for home bank ATMs in other areas. Otherwise, they might have to pay up to Rs20 for any cash withdrawal from other ATMs that are not of the home bank. This can surely cause some kind of trouble for the account holders of cities, or they have to end up paying excess amount on their withdrawal from other ATMs.

Freedom Of Atm Operations Required:

As far as, the customers are concerned, the existing regime of free withdrawal up to 5 times should continue. According to them, this is required for the development of the market. They claim that the freedom of white label operators of ATM should not be limited or restricted. In addition to that, price points should also not be dictated through inter-bank interchange charges. In fact, some of the executives of ATM deploying companies are of the same view. The restriction has not yet started, but it is expected that the limit would start getting applied.

Banks Had To Pay Transaction Fees:

It was in 2009 that access to the third party ATMs was made free. As a result, customers could withdraw money from any ATM. It was due to a representation from banks that RBI agreed to cap the number of free withdrawals. It was then restricted to 5 withdrawals a month in other third party ATMs. The limit for total cash withdrawal from third party ATMs was fixed to Rs10, 000. Though this transaction was free for customers, home banks had to pay about Rs18 per transaction to the third party banks for using their machines. This turned out to be a major expense for the banks.

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Increasing Numbers Of ATMs:

Brown label ATMs were installed by the banks and the major investments came from technology companies. They made investments on behalf of the banks and collected rents from banks in return. This was an additional expense for banks. However, it was because of this reason that the numbers of ATMs has increased over the years and customers could enjoy the benefit of withdrawal. With increased restrictions, account holders will have to be more careful while withdrawing money from third party ATMs.

Vidhyaa Sree Vidhyaa Sree is a freelancer/Content Writer and author of www.gogreenguyz.com

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One Reply to “Restriction On Third Party ATM Withdrawals”

  1. If they put restriction on number of transactions, the motivation to install extra ATM machines will go away, causing more trouble for customers.

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