Saturday, August 2, 2014

Only 2 free third-party ATM withdrawals month

Only 2 free third-party ATM withdrawals month



After Exhausting Limit, Urban Customers Will Face `20 Fee At Non-Home Bank Machines
The number of free withdrawals from thirdparty ATMs is soon set to come down from five a month to two for accountholders in cities. The Reserve Bank of India (RBI) has asked banks to continue with the existing facility for rural ATMs and provide them details of the number of machines that are there in villages.The downside for customers is that if there is no home bank ATM nearby and they have exhausted their free usage, they will have to pay up to Rs 20 for a cash withdrawal from a third-party ATM.
Banks have been lobbying for a cap on free usage and an increase in the fee that they pay each other for their customers using other banks' ATMs. Their argument is that the free access is being misused and accountholders have increased their frequency of withdrawals. This results in a loss to the card-issuing bank. At the same time, ATM deployers are complaining that they are facing an in crease in charges following RBI and policy directives on new security features.
At present, the fee is capped at Rs 15 which the ATM-deploying banks want to be increased. But other banks whose card issuances are disproportionate to their ATM networks and end up paying other banks on a net basis want the Rs 15 cap to continue.
Industry sources said that the inter-bank interchange fee would go up by around 10% which would incentivize further deployment of machines.
“From the customer point of view, the existing regime should continue. For the market to develop, the freedom of ATM operators -including white-label ATM operators -should not be restricted and price points should not be dictated by inter-bank interchange charges,“ said an ATMdeploying company executive.
Access to third-party ATMs (machines other than those installed by the home bank) was made free in April 2009. However, following a representation from banks, RBI agreed to cap the number of free withdrawals to five a month and limited the total cash withdrawal to Rs 10,000 from third-party ATMs. Although the transactions were free for customers, each bank paid the ATM-owning bank Rs 18 per transaction for use of its machines.





No comments:

Post a Comment