by Zakia Qurashi
SRINAGAR: Withdrawing your own money will be slightly costlier if you are using your ATM cards, obviously beyond eight free transactions.
On June 10, 2021, the Reserve bank of India (RBI), had notified the change allowing all banks to increase the service charges levied for ATM transactions once the free monthly transactions are exceeded.
Under the system in vogue, the customers are eligible for five free transactions (inclusive of financial and non-financial transactions) every month from their own bank ATMs. Besides, they are also eligible for free transactions (inclusive of financial and non-financial transactions) from other bank ATMs – three transactions in metro centres and five transactions in non-metro centres.
Beyond the free transactions, the customers were being charged Rs 20, per transaction. Now it has been marginally changed.
“To compensate the banks for the higher interchange fee and given the general escalation in costs, they are allowed to increase the customer charges to Rs 21 per transaction,” the RBI notification said. “This increase shall be effective from January 1, 2022. Applicable taxes, if any, shall be additionally payable.”
The new service charge will now be Rs 21 plus GST. The last change in the ATM use fee was made in 2012 and the charges payable by the customers were revised in August 2014.
“Under the new guidelines of RBI, a person can withdraw money from ATMs only five times per month and on the sixth transaction extra charges with GST will be applied.” a Jammu and Kashmir Bank official said.
Explaining the process further, he said there are two types of ATM transactions, “On-us and Off us.”
“On-Us transactions are those when the card and the ATM both are of the same bank. Till now, with J and K Bank, a person could do eight on-us transactions per month and on the ninth transaction the charges would be levied as per our bank’s charge schedule,” he said.
Off-Us transaction is when the card and the ATM are from two different banks, he said. “You can do five transactions per month and charges of Rs 21 plus GST will be applicable from the sixth transaction,” he added.
Covid19 and the law and order situations have made ATM cards use a popular way of managing bank accounts. Informed sources in JK Bank – the main bank in Jammu and Kashmir, said the quantum of ATMs transactions done per day in Jammu and Kashmir is approximately 200 thousand and near about Rs 100 crore are disbursed every day through its ATMs.
A former employee of the bank said that it used to cost about Rs 50-60 to the bank per customer to give services to him at the branch if (s)he choose the traditional bank cheque method. Entry of ATMs reduced the footfalls in the branches, saved a lot of time of the banks and the customers and triggered huge cost-cutting, if not the savings of the banks.
Now the banks are using the ATM network as a service, apparently de-linking the costs that they would incur if the customers return to the traditional system for withdrawing cash. At one point in time, the banks would deploy cops to manage the crowds waiting to withdraw their money.
“Now when they start charging again, people will gradually shift back to branches to withdraw money, leading to higher costs for the bank as well as disruption in the quality of the services,” a former banker admitted. “It has the potential of pushing customers back to the traditional system thus negating the efforts of online in coming days.