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RBI directs banks to exclude failed ATM withdrawals from mandatory free transactions

The regulator says non-cash withdrawal transactions such as balance enquiry and fund transfers, and financial transactions that fail due to technical reasons or non-availability of currency notes in ATM can't be counted among the 5 free transactions per month

twitter-logo BusinessToday.In        Last Updated: August 15, 2019  | 10:42 IST
RBI directs banks to exclude failed ATM withdrawals from mandatory free transactions
The apex bank added that some banks were hitherto including failed transactions and non-financial ones among the mandatory free transactions

The RBI issued a circular on Wednesday directing banks to exclude non-cash withdrawal transactions at the ATM, including fund transfers, as well as failed transactions from the five free transactions per month that banks have to mandatorily provide to their savings bank account holders. Although this cap was introduced in 2014, the regulator previously said that it would be inclusive of financial and non financial transactions.

"It is hereby clarified that transactions which fail on account of technical reasons like hardware, software, communication issues; non-availability of currency notes in the ATM; and other declines ascribable directly / wholly to the bank / service provider; invalid PIN / validations; etc., shall not be counted as valid ATM transactions for the customer. Consequently, no charges therefor shall be levied," read the circular. The apex bank added that some banks were hitherto including such transactions among the mandatory free ones.

Furthermore, non-cash withdrawal transactions such as balance enquiry, placing a cheque book request, payment of taxes, funds transfer, which constitute 'on-us' transactions - when a card is used at an ATM of the bank which has issued the card - can no longer be part of the number of free ATM transactions.

Different banks impose different fees for the usage of other bank ATMs, beyond the mandatory free transactions prescribed. For instance, SBI charges Rs 17, including tax of financial transactions, and Rs 6 for non-financial transactions. On the other hand, ICICI Bank charges Rs 20 plus GST per cash withdrawal at other banks' ATMs and Rs 8 plus GST for balance inquiry.

Also read: RBI directs banks to ensure steps to safeguard ATMs across country

Also read: RBI allows round-the-clock fund transfers under NEFT from December

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