Banks seek to cap free ATM transactions at 5 a month

Banks have put forth a request with the Reserve Bank of India (RBI) to be able to charge customers for ATM (Automated Teller Machine) transactions. Currently,  a customer can make unlimited transactions at an ATM (of a bank with which he/she holds an account) free of cost, but now the Indian Bankers Association (IBA)- the umbrella body of banks- has proposed to cap the number of free transactions at five a month.

The IBA has proposed that every transaction beyond five a month should attract a fee.

Transactions from other banks' ATMs may also attract a higher fee, as the bankers' body has proposed to increase the inter-bank fee for every visit after the sixth transaction to Rs 18 from Rs 15. Currently, one can make five free transactions at other banks' ATMs. Beyond five transactions a customer can be charged up to Rs 20 per transaction, at present.

The IBA's proposal comes in the wake of banks incurring an additional monthly outgo of Rs. 4,000 crore due to increased security requirements at ATMs, after a woman employee of Corporation Bank in Bangalore was attacked at an ATM by a man with a machete in November last year.

Following the incident, all banks were asked to deploy armed security guards at all 1.40 lakh ATMs round-the-clock.

(With inputs from PTI)