Free ATM usage Curbed

ONLY 5 TRANSACTIONS IN A MONTH
Not more than Rs 10k from other ATMs ... RBI has put a cap on thirdparty ATM withdrawal (When a cardholder is using other bank’s ATM) at Rs 10,000 per transaction and also limited the number of such transactions to five in a month. For more than five thirdparty transactions in a month, one has to pay Rs 20 per transaction.However, there will be no such limit when a cardholder is using his/her own ATMs. A senior official, who heads the ATM operation of a private sector bank, said the new scheme will be effective from October 1, 2009. RBI has already made all ATM transactions, including thirdparty ones, free of any extra charge. This has led to increase in the number of transactions taking place at third-party ATMs. The banker said that many customers started misusing the provision by withdrawing small amounts — even Rs 100 and that too almost daily. Your bank pays around Rs 20 per transaction to the other bank when you use its ATM to withdraw money. Even if you withdraw Rs 100 from any other ATM, your bank pays Rs 20 to that bank. This increases cost of operations for banks substantially. So, banks requested RBI to put a cap on the number of third-party withdrawals. Banks had also asked for a minimum withdrawal amount of Rs 1,000 for third-party transaction. But, RBI did not accept this demand as it would have affected small depositors.