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Free Withdrawal Limit, ATM Charges, What Transaction It Includes- 10 Points By RBI


The Reserve Bank of India (RBI) has asked banks not to treat failed transactions at ATMs or non-cash withdrawal transactions such as balance enquiries or cheque book requests as part of “five free transactions” available to customers every month. Currently, transactions failed due to technical reasons, non-availability of currency in ATMs, etc., are also included in the number of free ATM transactions. These transactions shall not be counted as valid ATM transactions for the customer, RBI said in a circular on Wednesday. “Consequently, no charges will be levied on these failed transactions,” it added.

Here are 10 things to know about RBI’s announcements:

  1. The central bank clarified that transactions which fail on account of technical reasons like hardware, software, communication issues; non-availability of currency notes in the ATM; and other declines ascribable directly/ wholly to the bank / service provider; invalid PIN / validations; etc., shall not be counted as valid ATM transactions for the customer.
  2. Non-cash withdrawal transactions (such as balance enquiry, cheque book request, payment of taxes, funds transfer, etc.), which constitute ‘on-us’ transactions (i.e., when a card is used at an ATM of the bank which has issued the card) shall also not be part of the number of free ATM transactions, RBI added.
  3. Earlier in 2014, RBI mandated minimum number of free transactions at ATMs.  
  4. The ATM charges apply depending on the type – whether it belongs to the same bank where the customer’s account is located or some other bank – and nature of ATM – whether the ATM is located in a metropolitan or any other city in the country. 
  5. For transactions at bank’s own ATMs at any location, banks offer a minimum of five free transactions in a month.
  6. For transactions at any other bank’s ATM at six metro locations -Mumbai, New Delhi, Chennai, Kolkata, Bengaluru and Hyderabad – banks offer a minimum of three free transactions in a month.
  7. However, if the card is used in other cities beyond the six metros in case of any other bank’s ATM, free transaction limit can be maximum five per month.
  8. Customers are charged for transactions at ATMs over and above the mandated number of free transactions.
  9. Currently, these charges cannot exceed a maximum of Rs 20 per transaction (plus applicable taxes, if any) by banks, according to RBI.
  10. These ATM transaction rule does not apply to Basic Savings Bank Deposit Account (BSBDA) as the number of withdrawals from BSBDA is subject to the conditions associated with such accounts.

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