The Reserve Bank of India (RBI) on Thursday reduced free transactions for savings bank account holders at other-bank ATMs from five to three a month in six metros.
The RBI said this would apply for transactions done at ATMs in Mumbai, New Delhi, Chennai, Kolkata, Bengaluru and Hyderabad, “which are well-served in terms of payment infrastructure.”
However, to protect the interests of the weaker sections of society, the reduction will not apply to customers having no-frills or small basic savings bank deposit account (BSBDA) type of accounts as well as for transactions done by savings bank account holders at ATMs situated outside these six metros.
The RBI said banks were free to offer free transactions above this mandated limit.
Further, taking into account the scope for cross-subsidisation and with a view to ensuring more transparency in the pricing of these transactions, the RBI advised banks to provide their savings bank account holders with at least five free transactions a month at their own ATMs.
Beyond this, banks can levy transaction charges (not exceeding Rs 20 plus taxes per transaction), which are decided in a transparent manner.
The RBI has advised banks to put in place a mechanism to make customers aware of the location-status of the ATMs (metro/non-metro) and also the fact that the transaction may attract charges. The RBI said the measure had been taken considering the growth in number of cash-access points.
