Use any ATM from April free of charge

Cash Play

Mumbai, March 29: Customers of a particular bank can withdraw money from ATMs of other banks without having to pay any extra charges from April 1.

Banks will not levy any fee on cash withdrawals using ATM and debit cards issued by their counterparts.

At present, banks charge Rs 20 per transaction if a customer uses another bank’s ATM to withdraw cash. A directive from the RBI prevents them from charging any fee from April 1 onwards.

However, banks can still charge extra for services such as cash withdrawal with the use of credit cards and at ATMs located outside India.

Last year, on March 10, the RBI had come out with guidelines restricting the fee charged by banks for using their ATMs by clients of other lenders to Rs 20. It had also allowed the use of ATM for purposes such as balance enquiry free of charge.

This was to ensure greater transparency and to facilitate usage of any ATM installed within the country by customers without shelling out more.

At the end of December 2007, there were 32,342 ATMs in the country. Various banks have entered into bilateral and multilateral arrangements with other banks to create inter-bank ATM networks.

The RBI directive was based on an approach paper on ATM charges brought out by the central bank in December 2007 where it justified the need for fixing a maximum ATM cash withdrawal fee of Rs 20, irrespective of the amount withdrawn. The paper had also recommended abolition of the fee, with effect from April 1 2009.

At present, the SBI has the largest number of ATMs in the country, followed by ICICI Bank.

Basel II norms

All banks have informed the RBI that they will abide by the global prudential banking norms, Basel II, from next month.