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.
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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.
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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.