Slash free ATM transactions for bank customers, says IBA

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Summary'Banks want to pass on increase in cost to their customers will be an individual bank's decision'

Free transactions through ATMs need to be limited to five per month, said MV Tanksale, chief executive, Indian Banks' Association (IBA), on Monday. The IBA has written to RBI to review the rules pertaining to ATM transactions and limit free transactions to five per month, irrespective of which bank the machine belongs to.

Currently, customers are provided with five free transactions each month on an ATM outside their bank network. Keeping in mind the recent criminal activities taking place at ATMs without proper security or surveillance, the IBA has asked RBI to raise the transaction charges for ATM transactions. Currently, for every transaction, the card issuing bank pays a fee of Rs 15 to the bank to which the other ATM belongs to.

IBA has demanded that this fee be raised to R18 per transaction to cover for the higher cost of security and surveillance. Whether banks want to pass on this increase in cost to their customers will be an individual bank's decision, Tanksale said.

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