IBA wants free use of other-bank ATMs to end in metros

IBA wants free use of other-bank ATMs to end in metros.

Indian Banks Association (IBA) on March 14, 2014 said it has requested the Reserve Bank of India (RBI) to allow banks to charge customers in the metros to pay for accessing Automated Teller Machines (ATMs) of other banks but continue with the current cap of five free transactions a month for rural customers.

ATM-Automated-Tellers-Machine“We have made our recommendations to the RBI that at least in the metros, the current five free usage of other bank ATMs be withdrawn so that every transaction on other bank ATM is chargeable. At the same time, the present set up be continued in rural areas,” chief executive of IBA Mr. MV Tanksale said.

The issue of charging customers for ATM usage has become into a very vexed one, ever since banks were asked by state governments to place armed guards at all the ATMs after a brutal attack on a customer in Bangalore last November.

According to banks, the overheads will make operations of ATMs unfeasible and hence, they have been struggling to come up with a solution for over three months now, without much of success.

The IBA says banks are losing Rs 400 crore a month because of the excess security requirements at 1.4 lakh ATMs.

A slew of measures, including raising the inter-bank charges and limiting the number of all free transactions at five per month, have been mooted.

Currently, a customer can enjoy unlimited free transactions at his own bank’s ATMs and is allowed five free transactions a month in other banks’ machines.

Irrespective of it being a free transaction for the customer or not, a bank has to pay the other a fee of around Rs 15 for every transaction done at the other bank’s ATM.

Meanwhile, when asked if banks have written to the Reserve Bank to extend the mark to market loss amortization by two more quarters, Tanksale said replied in the affirmative but did not confirm the time period for which the relief has been sought.

One thought on “IBA wants free use of other-bank ATMs to end in metros

  1. Ajit kumar singh says:

    A/c to IBA 1st 5 transaction should be free for customer.

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