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Reserve Bank of India clarifies free ATM transactions

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August 16, 2019

In a relief to ATM users across the country, India's central bank has clarified the rules governing free ATM transactions.  

Transactions that failed due to technical glitches related to hardware, software, communication and non-availability of currency notes won't be counted as valid ATM transactions, according to a release from The Reserve Bank of India. Invalid PINs and other declines ascribed directly to the bank — which resulted in failed ATM transactions — along with on-us transactions (where a card is used at an ATM of the bank that issued the card), such as balance inquiry, checkbook request, payment of taxes and funds transfer, were also excluded.

Existing rules for free transactions
According to rules already in place, RBI requires banks to provide a certain number of ATM transactions free of cost every month. The number varies depending on transaction type, whether the ATM is in network or out and whether the ATM is in a metro city.

For transactions at ATMs outside the home bank's network but in one of six metros — Mumbai, Delhi, Chennai, Kolkata, Bengaluru and Hyderabad — customers are entitled to a minimum of three free transactions in a month.

For in-network transactions, banks must offer customers at least five free transactions per month.

For any transactions at ATMs of other banks outside these cities, customer must receive a minimum of five transactions at no charge.

According to RBI, banks need to clearly indicate that the ATM is situated in a metro or non-metro location using appropriate means, such as a sticker or a poster. Additionally, banks should ensure that the "ATM location identifiers" in their ATM databases are accurate and up-to-date.

Customers must pay for transactions outside the mandated freebies, and while those charges vary from bank to bank, they cannot exceed a maximum of Rs 20 per transaction, plus applicable taxes, according to RBI.