The Reserve Bank of India (RBI) on Monday told the Delhi High Court that the cap on free-of-charge ATM withdrawals was a “policy decision” and the court should not interfere in it. The court was hearing a petition filed by advocate Swati Aggarwal challenging the cap on withdrawals from ATM saying all modern economies allow free transactions.
Ms. Aggarwal had also sought directions to allow banking customers to make unlimited number of transactions free of any charges on their own bank ATMs.
“It is a policy decision. Why should the court interfere in it? They (petitioner) are challenging the circular of the RBI. I am challenging the maintainability of this plea,” the RBI counsel told a bench of Chief Justice G. Rohini and Justice Sangita Dhingra Sehgal.
As per RBI’s new guidelines, bank customers in six metros: Delhi, Mumbai, Chennai, Kolkata, Hyderabad and Bengaluru, are allowed to withdraw money free of charge only five times a month from their ATMs and every transaction after the first five will be charged Rs.20 per use.
The RBI counsel said besides the five free transactions from one’s own bank ATM, customers can avail three free withdrawals from ATMs of other banks and the new cap was to decrease cash transaction and promote digital transactions.
