The Reserve Bank of India (RBI) has asked commercial banks not to treat ATM transactions failing for technical reasons as well as non-cash withdrawal transactions – such as balance enquiries or cheque book requests – as part of the free transactions available to customers every month. Currently, transactions failed due to technical reasons or non-availability of cash in ATMs are counted as valid transactions.
This means such transactions are treated as normal transactions, and lead to charges as soon as the customer exhausts the maximum number of free transactions in a month. These transactions “shall not be counted as valid ATM transactions for the customer”, the central bank said in a communication to banks issued on Wednesday.
Here are 10 things to know:
- The central bank directed the lenders not to count transactions failing on account of technical reasons such as hardware, software or communication issues and non-availability of currency notes in the ATM for the customer.
- All scheduled commercial banks – including regional rural banks, urban/state/district central co-operative banks, small finance banks and payment banks – as well as white label ATM operators have also been directed not to treat transactions failing due to reasons such as invalid PIN and validation among the free transactions allowed to a customer in a month.
- Non-cash withdrawal transactions – such as balance enquiry, cheque book request, payment of taxes and funds transfer – will also not be part of the number of free ATM transactions, according to the RBI.
- “Consequently, no charges will be levied on these failed transactions,” the RBI added.
- According to existing rules, banks provide a certain number of transactions free of cost every month to the customer. The number of such transactions allowed to the customer every month varies, depending on factors such as type – whether the ATM is part of the home bank’s ATM – and location of the ATM – whether it is located in a metro city.
- For transactions at the ATMs in the network of the same bank as the account, the lenders offer a minimum of five free transactions in a month.
- For transactions at ATMs outside the home bank’s network but in one of six metros – Mumbai, Delhi, Chennai, Kolkata, Bengaluru and Hyderabad, they offer a minimum of three free transactions in a month.
- For any transactions at ATMs of other banks outside these cities, a minimum of five transactions are provided to the customer free of cost, according to current rules.
- Customers are charged for transactions at ATMs over and above the mandated number of free transactions. The charges applicable in case of any transactions above the monthly threshold vary from bank to bank.
- Currently, these charges cannot exceed a maximum of Rs. 20 per transaction (plus applicable taxes, if any) by banks, according to the RBI.