If you are in the habit of visiting your ATM frequently then you should now be watchful as beginning December 1, 2014, more than 5 monthly visits to your bank’s ATM for a financial transaction may cost you over Rs 20 and a non-financial transaction will attract over Rs 8.5 as penalty. Several banks have already announced that they will charge customers for additional transactions.

As per the directive issued by the Reserve Bank of India (RBI) dated August 14 and then on October 10, 2014, with effect from November 1, 2014, the number of free transactions at your ATMs of your own bank has been limited to 5 in a month (as against unlimited free transactions till now). In case of other bank’s ATM, the number of free transactions have been brought down from five to three (in the six metros) while it has been kept at 5 for non-metros.

The six cities that RBI has identified as metros for the same are —Mumbai, New Delhi, Chennai, Kolkata, Bangalore and Hyderabad.

“Banks are advised that at least five free transactions (inclusive of financial and non financial transactions) per month should be permitted to the savings bank account customers for use of own bank ATMs at all locations,” said the RBI directive which has put a cap of Rs 20 (plus service tax) as charge for every additional transaction.

Several banks including State Bank of India, HDFC Bank, Axis Bank have already announced that they will be levying charges on ATM usage over and above the minimum permitted by the RBI, beginning December 1, 2014. ICICI Bank has, however, not yet announced the same.

The impact

If you live in one of the metros and visit your ATM once in two days to withdraw cash then you will exceed your monthly free withdrawal limit (including own and other bank ATM) by 7 times which means that you will have to pay a penalty of over Rs 140 in the month which comes to Rs 1,680 in a year.

Ways by which you can reduce your ATM visits

There are however some ways by which bank customers seek to bring down their ATM visits and thereby avoid paying the penalty on such transactions.

Most monetary transactions and a lot of non-financial transactions such as cheque book requests, credit card payments, checking your account balance or generating a mini statement can be done by logging into the net banking account and customers can avoid visiting ATMs for such purposes.

Some banks including HDFC Bank, ICICI Bank and Axis bank offer a missed call service for non-cash transactions where the customer can call a dedicated number from their registered mobile number following which an SMS is sent by the bank. Customers can use it for balance enquiries , checking mini-statements, cheque books and making account statement requests. All that a customer needs to do is to store the toll free numbers of his/her bank and call on it. Customers can also go for more debit card transactions rather than cash transactions as it reduces the need for cash withdrawals.

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