Costly ATM transactions

The Reserve Bank of India has again lowered its cap on free transactions. Starting from the month of November, if a person makes innumerable transactions from other bank’s ATMs in a month, then he will be charged Rs. 20 per transaction. Still, the sad part is, he will be charged even if he withdraws from his own bank after five transactions.

This new rule presently applies to six metro cities, that is, Mumbai, New Delhi, Kolkata, Bangalore & Hyderabad. However, Rs. 20 is not fixed. It can extend according to the cash flow.

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On August 14, RBI had issued a circular which stated that the banks can charge its customers even if they use their own bank’s ATM. Up till now, customers were not charged anything for withdrawing money from their respective bank’s ATM.

The central bank has also asked banks under it to convey to its customers about the new notice of making limited transactions through posters, SMS and other modes.

There is a purpose behind these increasing charges levied. It can be described as: when a customer uses his own bank’s ATM, an average bank costs Rs. 18 to 25 per transaction but on the other hand, if the same is applied to other bank’s ATMs, your bank has to pay an interchange fee of Rs. 15-20 per transaction. That is why, the banks are increasing the capped amount.

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So, there are few points which you can keep in mind while withdrawing late this winter.

• You can use your credit or debit cards for transactions. They may charge 1-2% transaction fee but then there is less danger of over-spending.
• You can plan your transactions. Instead of waiting for being broken, you can withdraw the monthly expenditure in advance.
• Try to use ATMs of ‘your bank’ as far as possible. Install a mobile application for nearest mobile locator while travelling.
• Use net or mobile banking which can be done sitting at home.

So, there are few points which you can keep in mind while withdrawing late this winter.