IBA wants free use of other-bank ATMs to end in metros-LiveMint
Wants cap of five free transactions a month for rural customers to continue
Mumbai: Industry lobby Indian Banks Association (IBA) on Friday said it has requested the Reserve Bank of India (RBI) to allow banks to charge customers in the metros to pay for accessing automated teller machines (ATMs) of other banks but continue with the current cap of five free transactions a month for rural customers.
“We have made our recommendations to the RBI that at least in the metros, the current five free usages of other banks’ ATMs be withdrawn so that every transaction on other bank’s ATM is chargeable. At the same time, the present set-up be continued in rural areas,” IBA chief executive M.V. Tanksale told reporters in Mumbai. The issue of charging customers for ATM usage has become a very vexed one, ever since banks were asked by state governments to place armed guards at all ATMs after a brutal attack on a customer in Bangalore last November.
According to banks, the overheads will make operations of ATMs unfeasible and hence, they have been struggling to come up with a solution for over three months, without much of success.
IBA says banks are losing Rs.400 crore a month because of the excess security requirements at 140,000 ATMs.
A slew of measures, including raising the inter-bank charges and limiting the number of all free transactions to five per month have been mooted.
Currently, a customer can enjoy unlimited free transactions at his own bank’s ATMs and is allowed five free transactions a month in other banks’ machines. Irrespective of it being a free transaction for the customer or not, a bank has to pay the other a fee of around Rs.15 for every transaction done at another bank’s ATM. When asked if banks have written to the Reserve Bank to extend the mark to market loss amortization by two more quarters, Tanksale replied in the affirmative but did not confirm the time period for which the relief has been sought.
“We have certainly requested. It is being examined,” he said. Fearing the heavy losses booked by banks after the July liquidity sucking measures, the RBI had allowed the banks to book their losses spread across four quarters in order to protect bottomlines. On the wage revision issue, Tanksale said IBA is scheduled to hold a core committee group meeting with the bank unions.
He, however, reiterated that there is no change in the stance of the banks and they continue to offer a 10% hike as against a demand for 15%.
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