Offering a bonanza gift to millions of banking customers, the Reserve Bank of India (RBI) has prevented all the banks to charge transaction fee for withdrawing cash using Automatic Teller Machine (ATM) cards and debit cards issued by other lenders. This direction of RBI is going to be effective from April 01.
From April 01 onwards, customers need not have to sweat it out looking for an ATM of their own bank as they can use ATMs of their choice without fear of paying any transaction fee.
However, the transaction fee on withdrawing cash outside India using ATMs and Debit Cards will continue. Moreover, the existing transaction fee for withdrawing cash using credit cards will also continue, RBI stated.
Earlier, the apex bank in an approach paper ‘ATMs of Banks: Fair Pricing and Enhanced Access’ on December 24, 2007 had suggested a series of measures to make more transparency in banking system, especially in withdrawing cash using ATMs of other banks. Presently, various banks charge different transaction fees for cash withdrawal from other lenders’ ATM for which the customers were mostly unknown.
In a series of measures, RBI in a circular released on March 10 last year had directed that all banks would not charge more than Rs.20/- per transaction for withdrawing cash from other banks’ ATM while no fee would be charged for balance enquiry from April 01, 2008.
In the second phase that is going to be effective from April 01, 2009, RBI has directed all banks to stop charging cash withdrawing fee from other banks’ ATM using ATM cards and debit cards.
However, RBI has allowed the banks to charge interchange fee that is paid between banks that ranges broadly between Rs.15 to Rs.20 per transaction. This move of RBI will benefit those banks, which have more ATM machines because since April 01, customer won’t fear of paying extra money for withdrawing cash and will use the nearest and most favorite ATMs.
At present, the State Bank of India (SBI) is the strongest network of ATMs followed by ICICI Bank in India.
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