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Free ATM usage at your home bank capped at five

Get ready to pay using Automated Teller Machines (ATMs) frequently of even your own home bank ATM network.

Reserve Bank of India (RBI) today said that banks are free to charge their customers beyond five ATM transactions per month, though a board approved policy on this issue should be in place.

Till now, only non-home bank customers were charges for using ATM beyond 5 transactions. The cap on per transaction charges has been retained at Rs 20.

These transactions include both financial as well as non financial transactions that includes-balance enquiry, change of pin number, mini statement etc.

Apart from this, the number of free transactions at non-home branch ATMs has been reduced to three from five. Non-home branch ATM refers to ATMs of banks in which the customer does not have a bank account.

“Taking into account the high density of ATMs, bank branches and alternate modes of payment available to the customers, the number of mandatory free ATM transactions for savings bank account customers at other banks’ ATMs is reduced from the present five to three transactions per month (inclusive of both financial and non-financial transactions),” RBI said in a circular.

However, this is applicable for transactions done only in the six metros- Mumbai, New Delhi, Chennai, Kolkata, Bengaluru and Hyderabad. Banks, can still choose to offer more than free five transactions to the consumers, if they wish to.

These changes will be applicable from November 1 this year and banks have been advised to ensure that the new norms are communicated to the customers effectively.

Banks, in association with the National Payments Corporation of India, had earlier sent a proposal to the banking regulator to reduce the number of free transactions at non-home branch ATMs and also be allowed to charge consumers for using their own bank branch ATM network.

This demand for the reduction in free ATM transaction started after banks came under pressure to beef up security at ATMs, after the attack on a woman in Bangalore last year.

Lenders complain that the increased security has translated into increased cost and therefore in order to stay profitable, they should be allowed to charge more.

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