In a circular issued to the Banks, the Apex Bank said that this would apply to banks which were charging more than Rs 20 per transaction and they should reduce the charges to a maximum of Rs.20 per transation irrespective of the amount of withdrawal. they should also not levy any charge for other usages, the RBI said. It, however, said for use of own ATMS for any purpose the banks should not charge any transaction fee.
The circular was based on the response the Central Bank had received to the approach paper it had released in its website on December 23 last year.
The service charges for the cash withdrawal transactions using credit cards and using an ATM located abroad might be determined by the banks themselves.
At the end of December, the number of ATMs deployed in India was 32,342. Commensurate with the branch network, larger banks have deployed more ATMs. Most banks prefer to deploy ATMs at locations where they have a large customer base or expect considerable use. To increase the usage of ATMs as a delivery channel, banks have also entered into bilateral or multilateral arrangements with other banks to have inter-bank ATM networks, the RBI said.
Charges levied on the customers vary from bank to bank and also vary according to the ATM network that was used for the transaction.
Consequently, a customer was not aware, before hand, of the charges that would be levied for a particular ATM transaction, while using an ATM of another bank. This generally discourages the customer from using the ATMs of other banks. It was, therefore, essential to ensure greater transparency.