Make ATM transactions free of cost: RBI

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Mumbai, Dec 24 (UNI) The Reserve Bank of India (RBI) today directed the banks to make their automated teller machine (ATM) transactions free of cost.

The apex bank directed the ATM banks to practise fair pricing, enhance access and not to increase the transaction charges.

RBI said the banks will not be able to increase the ATM charges for cash withdrawals prevailing as on December 23 this year.

''Banks charging more than Rs 20 per transaction shall reduce the charges to Rs 20 per transaction by March 31 next year,'' the central bank said in a release.

According to a release on its website, the central bank has also invited feedback from all interested stakeholders on the draft approach paper. The paper was prepared in public interest after taking into consideration the current situation and after studying the international and the domestic practices in this regard, the release noted.

In order to promote and encourage greater financial inclusion and promote enhanced ATM access, the central bank made it clear that this should be effective from April 1, 2008.

At present, banks in India have deployed more than 31,000 ATMs.

The apex bank said the banks in India have also entered into bilateral or multilateral arrangements with other banks to have inter-bank ATM networks and to increase the usage of ATMs as a delivery channel.

ATMs have gained prominence as a delivery channel for banking transactions in the country, especially for cash withdrawal and balance enquiry, RBI said.

''As the charges levied on the customers vary from bank to bank and also vary according to the ATM network that is used for the transaction, a customer is not aware, before hand, of the charges that will be levied for a particular ATM transaction,'' it said, adding, it generally discourages the customer from using the ATMs of other banks.

Enhanced and cost-effective access to ATMs plays an important role in technology-based financial inclusion, the bank added.

UNI

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