Banking consumers will have to pay more if they are prolific with ATM transactions as largest lender SBI and its private sector peers HDFC Bank and Axis Bank have capped the free-usage at three in six metros.
The capping and additional fees on excess usage come following the recent Reserve Bank circular allowing banks to limit the number of free ATM transactions to five — three in the largest six cities and two elsewhere — a month.
Under the new norms, which have been accepted by the RBI, a customer can do just three free ATM transactions in the six largest cities at own-bank machines and two elsewhere.
The new limits and rates by SBI, HDFC Bank and Axis will be applicable to transactions done in Mumbai, New Delhi, Chennai, Kolkata, Bangalore and Hyderabad.
The SBI, which had reported close to Rs 400 crore loss by way of paying other banks as inter-bank ATM usage in FY14, was the first one to cap ATM transactions at three and impose fees of Rs 20 per subsequent transaction. Since November 1, the new norms are effective at SBI.
However, the bank has allowed more free ATM transactions to those who avoid visiting its branches, and unlimited transactions for those with large balances.
The second and the third largest private sector players HDFC Bank and Axis Bank have also followed suit and said effective December 1, they too will be charging Rs 20 per transaction above five a month.
While HDFC Bank will charge Rs 20 for cash withdrawals and Rs 8.5 (excluding taxes) for balance enquiry, mini statement, etc, Axis Bank will also charge Rs 20 and taxes for financial transactions and Rs 9.5 for non-financial ones.
At the third-party ATMs, HDFC and Axis will charge for more than three transactions, down from the earlier five free transactions, the banks said in separate customer notifications.
Axis Bank, which with a little over 12,000 ATMs is the no. 2 player after SBI, however, is offering 10 free transactions for its Prime Plus savings account and Prime salary account holders.
But both these account-holders need to have a minimum opening balance of Rs 1 lakh and they can have first five free transactions at non-home bank ATMs.
However, second largest lender ICICI Bank, with 11,739 ATMs, and fourth largest private sector lender Kotak Mahindra Bank told PTI that they are not revising the charges and limits of ATM usage from the existing levels.
Except SBI, however, none of the state-run lenders has announced charging ATM transaction beyond five, as is the practice now.
Banks, in association with the National Payments Corporation that issues the RuPay Cards, had earlier sent a proposal to the RBI to reduce the number of free ATM transactions at non-home bank ATMs due to the higher cost incurred by them. They also wanted the RBI to go ahead with capping free ATM use by their own consumers to control cost.
Following this, the RBI issued guidelines in August allowing banks to charge their customers Rs 20 per transaction after the first five free transactions from November 1.
From November 1, SBI has been charging for more than own-ATM withdrawals a month with those accounts having less than Rs 25,000 in monthly balance. But those accounts with over Rs 25,000 and above in balance there is no limit at its own ATM network. But, their access to third-party ATMs are capped at three a month.
Those who exceed the limit will pay Rs 5 per transaction at its ATMs and Rs 20 at machines belonging to other banks. The bank is charging Rs 8 for each non-financial transaction above the cap.
The bank has also raised the number of free usage on its home network from five to nine, if a customer does not visit a branch during the month.
For those who maintain average balances of over Rs 1 lakh, SBI is providing unlimited access to all ATMs. However, those with less than Rs 25,000 balances are charged above five transactions on its ATMs and three at third-party machines.
As per latest data from the RBI, at the end of June quarter there were 1,66,894 ATMs in the country and with 44,929 machines, SBI is way ahead of its nearest rival Axis Bank by more than three times or over 27 per cent of the market.
SBI has 12.59 crore cardholders and accounts for 31 per cent of the 40.9 crore debit cards in the country and its cardholders are responsible for over 41 per cent of all ATM transactions.