Mumbai, Aug. 21: The unfettered access to automated teller machines (ATMs) will soon be curtailed.

In two months, customers who use ATMs that belong to other banks will be able to withdraw only Rs 10,000 every time they swipe their card. Moreover, the number of times they can access third-party ATMs without having to pay a fee will be restricted to five a month.

From April 1, banks were prevented by the Reserve Bank of India from charging any fee for cash withdrawals using ATM and debit cards issued by other banks.

Earlier, banks used to charge Rs 20 per transaction from a customer who didn’t have an account with them.

The latest development comes after the Indian Banks’ Association, the representative body of private sector, foreign banks and nationalised banks, apprised the RBI about the difficulties that member banks were facing because of unfettered access to their ATMs. The banks said the move to allow free ATM withdrawals not only led to a surge in costs since the number of transactions had multiplied but also revenue losses.

Earlier, a third-party bank whose ATM was being used to withdraw cash, paid an interchange fee to the customer’s bank which was passed on to the withdrawing customer. But with withdrawals becoming free, this fee is now being borne by the bank themselves.

Sources said the central bank accepted the suggestion to limit the number of free transactions to five a month and cap the withdrawal limit at Rs 10,000 per card swipe.

However, the RBI rejected a suggestion from the bankers’ body to fix a minimum withdrawal limit of Rs 1,000 on third-party withdrawals.

Sources close to IBA added that these changes were likely to be implemented only in October.

They said banks could decide whether to levy a charge on third-party withdrawals beyond the five-card swipes a month. Banks could also decide not to charge a fee at all.