Restriction on third party ATM withdrawal

Restriction on third party ATM withdrawal

While answering to a question in Parliament on 25th Nov 2014 regarding the reduction of number of free withdrawals from other banks ATMs. The Minister of State for Finance Shri Jayant Sinha said, the decision was taken by Reserve Bank of India in view of the Indian Banks’ Association’s plea for removal of free transactions at other banks ATMs at metro centres.

“Reserve Bank of India (RBI) has issued directives to Banks under Section 10(2) read with Section 18 of Payment and Settlement Systems Act, 2007 (Act 51 of 2007), that the number of mandatory free 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) for transactions done at the ATMs located in the six metro centres, viz. Mumbai, New Delhi, Chennai, Kolkata, Bengaluru and Hyderabad. The banks can offer more than three free transactions at other bank ATMs to their account-holders.

The decision was taken by Reserve Bank of India in view of the Indian Banks’ Association’s plea for removal of free transactions at other banks ATMs at metro centres and other large townships in the country in view of the growing cost of ATM deployment and maintenance incurred by banks on the one hand as well as the rising interchange out-go due to these free transactions”.