RBI Cuts Free Bank ATM Transactions
In a rather surprising move, the RBI has limited the number of free transactions at ATM not only at third-party ATM’s (or other banks’ ATM) but also at same bank ATM’s in metro cities of Delhi, Mumbai, Chennai, Bangalore, Kolkata and Hyderabad. At a time when government and the RBI are pushing for greater and easier financial inclusion, this decision comes as a surprise, if not a rude shock.
This decision raises many questions, some of which we list here:
- Is it less costly for banks to process withdrawals at bank counters than at ATM’s? This questions arises because no charge or cap has been proposed for transactions at bank counters.
- Is it more convenient for customers to withdraw cash at bank counters than at ATM’s?
- Is the cost of maintaining ATM’s in six metros more than that in rest of the country?
- If a customer wants to withdraw Rs. 20000 but the ATM dispenses only Rs. 10000 at a time, will this count as one transaction or two transactions?
- By defining a transaction to include financial and non-financial transaction, even checking account balance or requesting a cheque book at ATM would count as a transaction. Do we want to go back to the “passbook-era” where customers must visit bank branch to get passbooks updated? Will that be more cost effective for the banks, the customer and the economy at large? Any case, most banks don’t issue passbooks or send statements to customers anymore.
Myloancare sincerely hopes and prays RBI and the Indian Banks’ Association (IBA) will annul this move before its effective date of 1st November 2014.
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