Country’s largest private sector lender ICICI Bank has announced a hike in its ATM charges...
Country’s largest private sector lender ICICI Bank has announced a hike in its ATM charges for saving account holders from January 1 next year.
Under the new method, the number of free transactions in a month is fixed at five using own ATMs, while it has been capped at three for other banks’ machines.
Customers can enjoy only five free transactions, including financial and non-financial, at the bank’s own automated teller machines (ATM), it said in a post on its website.
After exceeding the free transaction limits, customers will have to pay Rs 20 per financial transaction excluding service tax and Rs 8.50 for every non-financial transaction, it said.
For transactions at non-ICICI Bank ATMs, the number of free financial and non-financial transactions have been reduced to three per month at six metros of Mumbai, New Delhi, Chennai, Kolkata, Bengaluru and Hyderabad, after which the customer will have to pay Rs 20 for a financial transaction and Rs 8.50 per non-financial transaction.
In case of usage in non-metro areas, a customer can enjoy five free transactions per month at non-ICICI Bank ATMs, after which the same charges apply, it said.
The issue of ATM usage has been a very contentious one due to the inter-connect charges a bank has to pay to the other. Additionally, the operating costs have also gone up, following a spate of incidents at the ATMs like the robbery at Bengaluru last year, which started the debate on transaction charges.
After consultations, the RBI last month started a system under which it allowed banks to charge from the fourth transaction onwards at other banks’ ATMs in metros, and also gave the liberty to banks to charge customers for the sixth transaction onwards at own machines.
“The ATM transaction is free to you but not free to the bank. It costs the bank Rs 75 to Rs 100 for those five transactions. The bank has to collect that amount from somewhere and it has to be from customers. But there are two distortions that it creates. First, not everybody is doing the same amount of transactions and (also) are we subsidising using of cash by freeing up ATMs ?,” RBI Governor Raghuram Rajan had said, in defence of the new move.
Many banks have already announced reviews in their ATM charges following the announcement.