RBI will consider reducing number of free ATM withdrawals to five times.
New Delhi: The Reserve Bank of India will consider reducing the number of free ATM withdrawals, as recommended by the Indian Banks’ Association, in an effort to cut down on cash transactions in the economy.
“We will examine that (IBA recommendation). Many other proposals have come. The whole idea is that people are using too much of cash and adding to the costs. We will examine all those issues,” RBI deputy governor H.R. Khan said.
The IBA recently recommended a change to include all ATM transactions, including the own-bank ones, to five per month in view of the rise in costs due to additional security measures being put in place following the Bengaluru incident wherein a person was brutally attacked at the ATM.
SBI chairperson Arundhati Bhattacharya has backed the idea of charging customers for transactions, adding that a commercially-viable model is needed for ATM network expansion. “I have a huge number of customers, who have very small balances.
Now, if these people go and access some other ATM and not mine, I have to pay that bank Rs17 (including taxes) for every such transaction. When I am not earning anything from that account, how can I bear these charges forever?” she said.
She also conceded that the SBI loses out due to the long queues at its ATMs due to which customers walk across to adjoining ones.
The RBI too appears to be favour of charging customers to cut down on cash transactions in the economy in a bid to minimise the risk of money laundering in the system.
Right now, people having savings accounts enjoy five free transactions per month at the ATMs of banks other than their own, while there is no such limit for use of ATM owned by their own bank.
( Source : PTI )
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