A proposal by Indian banks to limit free transactions on automated teller machines (ATMs) to five per month for both their own and other banks’ customers has found few takers, and some critics say such a move would prove counter-productive.
Indian banks are lobbying for central bank approval to charge users of their ATMs a fee for more than five transactions, citing the increased cost of maintaining the network of machines. A representation to this effect has been made by the Indian Banks’ Association (IBA), the lobby group of banks, to the Reserve Bank of India (RBI).
Currently, banks are not allowed to charge their own customers for use of the ATM network, regardless of the number of transactions. Other banks’ customers are allowed upto five transactions free of cost per month.
“Operational costs have risen due to the need for security in every ATM and increase in frauds and we think the people of the country
Banks have been under pressure to step up security at ATMs after an incident in Bangalore in November, when a woman bank manager was brutally attacked and robbed inside an unguarded ATM kiosk where she was withdrawing money. Banks are also trying to earn more fee income as transactions on ATMs increase with their growing reach.
ATM service providers argue that limiting the number of free transactions may push customers away from using the machines and back towards bank branches, making it more expensive for banks in the long run.
Indian banks are lobbying for central bank approval to charge users of their ATMs a fee for more than five transactions, citing the increased cost of maintaining the network of machines. A representation to this effect has been made by the Indian Banks’ Association (IBA), the lobby group of banks, to the Reserve Bank of India (RBI).
Currently, banks are not allowed to charge their own customers for use of the ATM network, regardless of the number of transactions. Other banks’ customers are allowed upto five transactions free of cost per month.
“Operational costs have risen due to the need for security in every ATM and increase in frauds and we think the people of the country
Banks have been under pressure to step up security at ATMs after an incident in Bangalore in November, when a woman bank manager was brutally attacked and robbed inside an unguarded ATM kiosk where she was withdrawing money. Banks are also trying to earn more fee income as transactions on ATMs increase with their growing reach.
ATM service providers argue that limiting the number of free transactions may push customers away from using the machines and back towards bank branches, making it more expensive for banks in the long run.
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