How much will ATM transactions cost now?
The Reserve Bank of India (RBI) has put in place a regulation because of which you will be charged for the excess number of transactions at even own-bank automated teller machines (ATMs). From 1 November, banks have been allowed to charge if you transact more than five times a month at your own bank’s ATM. The restriction on own-bank free transactions is applicable throughout the country. Also, only three transactions will be free at other bank’s ATMs, compared with five earlier. But this limit is applicable only in six metro cities—Mumbai, New Delhi, Chennai, Kolkata, Bangalore and Hyderabad. It doesn’t necessarily have to be money withdrawal. Even non-financial instructions such as balance enquiry, chequebook request and mini-statement request will be included in this limit. For non-metro users, the number of free transactions at other bank ATM will remain five. Some banks, however, continue to allow free transactions, for a limited period. What it will cost Many banks have either adopted the change or are in the process of doing so. Some have set conditions. From 1 November, State Bank of India, for example, has set a monthly limit on the number of free financial and non-financial ATM transactions. The bank has linked monthly balance with ATM charges. If your average monthly balance is over Rs.1 lakh, there is no limit. If it’s up to Rs.25,000 in the savings account, you will have only five free transactions at your own-bank ATM and three free transactions at other-bank ATMs in a metro city. Charges are Rs.5-20 per financial transaction and Rs.5-8 for non-financial ones depending on the type of account. Free ATM service for basic savings bank deposit account holders will continue. The bank also stated that it will allow one-way inter-changeability between branch transaction and ATM transaction. For instance, a customer will be allowed nine free transactions at own-bank ATMs if she does not visit the branch at all during a month or eight free ATM transactions if she visits the branch once, and so on. Canara Bank has stated that it is not charging for transactions at own-bank ATMs. But more than three transactions at other-bank ATMs in the six metros and beyond five in other places are chargeable—Rs.15 for every financial transaction and Rs.5 for every non-financial one. Service tax will also be applicable. In the private banking space, banks will bring in the revised charges from 1 December. HDFC Bank Ltd has stated on its website that effective 1 December, savings and salary account customers will be allowed first five transactions free across all cities at own-bank ATMs. In the six metros, first three transactions will be free at the non-HDFC Bank ATMs. In non-metros, first five transactions will be free. Anything over this limit will be charged. For instance, cash withdrawal will be charged Rs.20 plus taxes per transaction and Rs.8.5 plus taxes per non-financial transaction. But for some accounts, such as basic savings bank deposit account, the limit is five at other-bank ATMs. Axis Bank Ltd, has stated on its website: “We have revised the number of free ATM transactions, which will be applicable with effect from 1 December. The transaction limits have been revised taking into account the high cost of operation and maintenance of our growing ATM network.” The new limits will be based on ATM usage patterns. For most of its savings accounts, the bank will follow the new RBI guidelines. It will charge Rs.20 per financial transaction and Rs.9.55 including tax for every non-financial one beyond the free limit. For some accounts, such as priority or defence personnel’s salary account, ATM transactions will remain free. Some are still free If you are with a smaller bank, chances are that you will continue to get free ATM service. Banks such as Yes Bank Ltd and Federal Bank Ltd have decided to continue giving free ATM services. “As of now, we give free transactions to our customers on own-bank as well as other-bank ATMs. In the foreseeable future we don’t want to charge. We are in a sweet spot where our base is not big. Some banks have 20-30 million customers; we have only crossed a million. So, business prudence says that we don’t create negativity by charging customers. Till we scale to a certain level, we will keep ATM transactions free,” said Pralay Mondal, senior group president (retail and business banking), Yes Bank. Thrissur-based Federal Bank Ltd also offers free ATM transactions for all its customers at other-bank ATMs too. “RBI has come up with these regulations as banks are facing huge expenses in managing ATMs, considering the improved security features that have been implemented. At present, we are not charging our customers for using our own ATM. For some time, we are allowing our customers outside Kerala to use other-bank ATMs for free for convenience. Also, we hope to migrate more customers to alternate digital channels,” said A. Surendran, head–retail and international banking, Federal Bank. Kotak Mahindra Bank, too, has decided not to revise charges. “We want to provide reach to our bank customers. As of now, there will be no change for them,” said Puneet Kapoor, executive vice-president (consumer banking) at the bank. What you should do With costs going up, it’s time to alter your ATM transaction behaviour. But before that, find out details from your bank. Though the RBI regulation is in place, banks still have the right to decide whether they want to charge their customers. As per the regulations, it is mandatory for banks to intimate their customers about any changes in service charges and fees. This means it is time to pay more attention to e-mails and SMSs from your bank. You can also visit the bank’s website to know the charges since it is mandatory for every bank to publish the changed service charges. For an individual, a total of 8-10 free transactions is good enough. To avoid paying for using an ATM, use Internet or mobile banking for non-financial transaction such as checking mini-statements and balance enquiries. All these services are free of cost on the website. Some banks also provide missed call service for balance enquiry, free of charge. For shopping, it may be better to use a debit card instead of cash. But do remember that some outlets charge an additional 1-2% of the total amount if you pay by card, and, of course, many smaller shops don’t accept cards at.
md.aquil alam
3rd semester pgdm
source. live mint
The Reserve Bank of India (RBI) has put in place a regulation because of which you will be charged for the excess number of transactions at even own-bank automated teller machines (ATMs). From 1 November, banks have been allowed to charge if you transact more than five times a month at your own bank’s ATM. The restriction on own-bank free transactions is applicable throughout the country. Also, only three transactions will be free at other bank’s ATMs, compared with five earlier. But this limit is applicable only in six metro cities—Mumbai, New Delhi, Chennai, Kolkata, Bangalore and Hyderabad. It doesn’t necessarily have to be money withdrawal. Even non-financial instructions such as balance enquiry, chequebook request and mini-statement request will be included in this limit. For non-metro users, the number of free transactions at other bank ATM will remain five. Some banks, however, continue to allow free transactions, for a limited period. What it will cost Many banks have either adopted the change or are in the process of doing so. Some have set conditions. From 1 November, State Bank of India, for example, has set a monthly limit on the number of free financial and non-financial ATM transactions. The bank has linked monthly balance with ATM charges. If your average monthly balance is over Rs.1 lakh, there is no limit. If it’s up to Rs.25,000 in the savings account, you will have only five free transactions at your own-bank ATM and three free transactions at other-bank ATMs in a metro city. Charges are Rs.5-20 per financial transaction and Rs.5-8 for non-financial ones depending on the type of account. Free ATM service for basic savings bank deposit account holders will continue. The bank also stated that it will allow one-way inter-changeability between branch transaction and ATM transaction. For instance, a customer will be allowed nine free transactions at own-bank ATMs if she does not visit the branch at all during a month or eight free ATM transactions if she visits the branch once, and so on. Canara Bank has stated that it is not charging for transactions at own-bank ATMs. But more than three transactions at other-bank ATMs in the six metros and beyond five in other places are chargeable—Rs.15 for every financial transaction and Rs.5 for every non-financial one. Service tax will also be applicable. In the private banking space, banks will bring in the revised charges from 1 December. HDFC Bank Ltd has stated on its website that effective 1 December, savings and salary account customers will be allowed first five transactions free across all cities at own-bank ATMs. In the six metros, first three transactions will be free at the non-HDFC Bank ATMs. In non-metros, first five transactions will be free. Anything over this limit will be charged. For instance, cash withdrawal will be charged Rs.20 plus taxes per transaction and Rs.8.5 plus taxes per non-financial transaction. But for some accounts, such as basic savings bank deposit account, the limit is five at other-bank ATMs. Axis Bank Ltd, has stated on its website: “We have revised the number of free ATM transactions, which will be applicable with effect from 1 December. The transaction limits have been revised taking into account the high cost of operation and maintenance of our growing ATM network.” The new limits will be based on ATM usage patterns. For most of its savings accounts, the bank will follow the new RBI guidelines. It will charge Rs.20 per financial transaction and Rs.9.55 including tax for every non-financial one beyond the free limit. For some accounts, such as priority or defence personnel’s salary account, ATM transactions will remain free. Some are still free If you are with a smaller bank, chances are that you will continue to get free ATM service. Banks such as Yes Bank Ltd and Federal Bank Ltd have decided to continue giving free ATM services. “As of now, we give free transactions to our customers on own-bank as well as other-bank ATMs. In the foreseeable future we don’t want to charge. We are in a sweet spot where our base is not big. Some banks have 20-30 million customers; we have only crossed a million. So, business prudence says that we don’t create negativity by charging customers. Till we scale to a certain level, we will keep ATM transactions free,” said Pralay Mondal, senior group president (retail and business banking), Yes Bank. Thrissur-based Federal Bank Ltd also offers free ATM transactions for all its customers at other-bank ATMs too. “RBI has come up with these regulations as banks are facing huge expenses in managing ATMs, considering the improved security features that have been implemented. At present, we are not charging our customers for using our own ATM. For some time, we are allowing our customers outside Kerala to use other-bank ATMs for free for convenience. Also, we hope to migrate more customers to alternate digital channels,” said A. Surendran, head–retail and international banking, Federal Bank. Kotak Mahindra Bank, too, has decided not to revise charges. “We want to provide reach to our bank customers. As of now, there will be no change for them,” said Puneet Kapoor, executive vice-president (consumer banking) at the bank. What you should do With costs going up, it’s time to alter your ATM transaction behaviour. But before that, find out details from your bank. Though the RBI regulation is in place, banks still have the right to decide whether they want to charge their customers. As per the regulations, it is mandatory for banks to intimate their customers about any changes in service charges and fees. This means it is time to pay more attention to e-mails and SMSs from your bank. You can also visit the bank’s website to know the charges since it is mandatory for every bank to publish the changed service charges. For an individual, a total of 8-10 free transactions is good enough. To avoid paying for using an ATM, use Internet or mobile banking for non-financial transaction such as checking mini-statements and balance enquiries. All these services are free of cost on the website. Some banks also provide missed call service for balance enquiry, free of charge. For shopping, it may be better to use a debit card instead of cash. But do remember that some outlets charge an additional 1-2% of the total amount if you pay by card, and, of course, many smaller shops don’t accept cards at.
md.aquil alam
3rd semester pgdm
source. live mint
But more than three transactions at other-bank ATMs in the six metros and beyond five in other places are chargeable—Rs.15 for every financial transaction and Rs.5 for every non-financial one. Service tax will also be applicable. In the private banking space, banks will bring in the revised charges from 1 December. HDFC Bank Ltd has stated on its website that effective 1 December, savings and salary account customers will be allowed first five transactions free across all cities at own-bank ATMs. In the six metros, first three transactions will be free at the non-HDFC Bank ATMs. In non-metros, first five transactions will be free. Anything over this limit will be charged. For instance, cash withdrawal will be charged Rs.20 plus taxes per transaction and Rs.8.5 plus taxes per non-financial transaction. But for some accounts, such as basic savings bank deposit account, the limit is five at other-bank ATMs. Axis Bank Ltd,
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