RBI CAPS THIRD-PARTY ATM WITHDRAWAL AT RS 10,000

Search News

THE Reserve Bank of India, which made third-party ATM transactions free from April 1, has said not more than Rs 10,000 can be withdrawn each time they are used and limited the number of such transactions to five a month.

   The apex bank has sent a communication in this regard to the Indian Banks' Association (IBA) and this is expected to be implemented shortly, IBA chief executive K Ramakrishnan said. "The Reserve Bank has agreed to put a cap of Rs 10,000 per withdrawal in such (third-party) transactions. Also, the number of such transactions will be limited to five times a month," Mr Ramakrishnan said.

   With the number of third-party transactions surging post-April, banks approached RBI through IBA, the representative organisation of private and public sector banks in India,torevisit the current norms and make necessary modifications. IBA had submitted its recommendations to the central bank last month citing the financial burden faced by banks on account of huge number of third-party usage and small-ticket withdrawals.

   RBI executive director G Gopalakrishna said RBI received suggestions from IBA on the matter, which was examined by the central bank. RBI said banks can charge Rs 18-20 per month from other banks in case of third-party ATM transaction.

   RBI has accepted the IBA proposal, but it will be implemented only by October, said IBA deputy chief executive K. Unnikrishnan.

   After the ATM transactions fees on using other banks’ ATMs was scrapped in April, the IBA studied the entire gamut of ATM transactions. “We found that a majority of the ATM transactions were in the range of average withdrawals of Rs 3,500-4,000, and 90% of all transactions were below Rs 10,000. Hence, the intended purpose to serve the common man was achieved,” Unnikrishnan said.

   However, there was a small minority of users who withdrew very large sums on account of high card limits given by some banks to privileged customers. At the other extreme, there were some customers who withdrew minuscule amounts, or made other kinds of inquiries. This created several logistics problems causing avoidable expenditure for banks at the cost of the common user, he said. Though IBA had also recommended a minimum limit of Rs 1,000 on thirdparty ATM withdrawals, this was rejected by RBI to protect the interest of small withdrawer.

Find Lawyer / Law Firm

Importance of Immigration Lawyers

As Indians we know India in itself is an amazing nation and even the world agrees with that, however, grass is always greener on the other side and that is why Indians desire to immigrate a More

Legal Consultation - Consult over phone, chat or send questions

Helplinelaw can set up your session with quality and experienced lawyers to discuss and resolve your legal matters. You can avail consultation in form of sending questions, phone call or webchat discussion  More