The Hindu : Karnataka / Bangalore News : Go on, swipe your ATM card for free

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Wednesday, Apr 01, 2009
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Karnataka

Karnataka - Bangalore

Go on, swipe your ATM card for free

Sharath S. Srivatsa

New regulation by the RBI not beneficial for customers using credit card

Customers were charged Rs. 20 for using ATM
of other banks
New norm will help customers in rural areas

— Photo: N. Sridharan

Facility: The new regulation will benefit a large number of customers whose banks do not have many ATMs.

Bangalore: From April 1, if you are short of cash and are looking to swipe your ATM card, you need not hunt for your bank’s facility. A new regulation by the Reserve Bank of India makes it mandatory on part of banks — both public and private sector — not to impose any charge on the customer from April 1, for using the ATM of a bank where he does not hold an account. So far, banks were charging Rs. 20 on customers who were using the ATMs in other banks while the charges for checking the account balance had been withdrawn some time ago.

While the State Bank of Mysore has 319 ATMs in Karnataka, State Bank of India has 477 ATMs.

Besides, there are several hundreds of ATMs operated by Canara Bank, Karnataka Bank, Syndicate Bank and others including the private sector banks.

“We might have to load cash into ATM machines more frequently than in the past. It is very difficult to predict the outflow of cash from ATMs and it might take a week or so to learn from experience,” a senior official of the State Bank of Mysore told The Hindu. The official said banks already have a monitoring system in place to check the cash outflows from the ATMs, and increased withdrawals from the ATMs should not cause any problem.

Benefits

The new regulation could bring more convenience to bank customers in rural Karnataka where the penetration of ATMs is far less when compared with that of the urban clusters.

Besides, it will benefit a large number of customers whose banks do not have many ATMs in Karnataka. So far customers having accounts with North and West India-based banks such as the Punjab National Bank, Bank of India, Bank of Baroda, Central Bank of India, Indian Bank and others had very limited option since the ATM base of these banks was small.

“The new regulation is also likely to benefit banks that do not have many ATMs. Accounts, which would have gone to banks with large ATM base could come to us now since accessing ATM will not be an issue any more,” a senior official of Punjab National Bank said. “When a customer of South India-based banks travel to North or West India, they will be benefited by our network,” the official said.

However, the new norm would not be beneficial when the customer uses the credit card.

“The charges for using the credit card outside the bank network depend on the company that issues the card, and there is no relaxation for such used under the new RBI regulation,” an official said.

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