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Rules are taking a turn for ATM transactions from November


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People have a habit of withdrawing small amounts of money from the ATM to restrict spending tendencies, but often end up with a high frequency of withdrawals. There are some others who are reluctant to use net banking or mobile banking facilities and depend on ATMs for checking account balance. If you happen to fall into any of these categories, it’s time to change your habit for good as RBI has issued new rules and guidelines limiting the number of times you use your ATM in a month. The new ATM transaction rules issued by the Reserve Bank of India is applicable to all ATM transactions including withdrawing cash, checking account balance or getting a mini account statement.

New RBI ATM Transaction Rules:

According to the new RBI guidelines that come into effect from 1st November 2014, savings bank account holders in metropolitan cities would be allowed only three transactions from ATMs of other banks and five from the same bank in a month. For any ATM transaction above the stipulated limit, a transaction fee of Rs. 20 would be charged to the account holder. The new transaction fee is applicable only for people living in six metropolitan cities including Mumbai, Delhi, Bengaluru, Chennai, Hyderabad and Kolkata. People living in smaller towns and other centers would continue to enjoy five free monthly transactions per month from the ATM of other banks and the charges for them include Rs. 20 for each cash withdrawal and Rs 9 for non-cash transactions. Account holders of zero balance and other no-frills accounts in non metros are exempted from such transaction charges as of now.

Tips to bypass ATM Usage Limit:

Since the new RBI rules on ATM transaction limits are likely to affect a vast majority of people, here are some tips individual account holders can use to avoid the fee hike.

  • Avoid cash transactions whenever possible:  If you are one of those individuals using cash transactions for every purchase and other financial transactions, it is time to explore other ways. The use of electronic funds transfer, credit and debit cards, cheques and demand drafts must be explored for financial transactions than using cash all the time.
  • Change the habit of withdrawing smaller amounts:  With an increase in the ATM transaction fee make sure you avoid withdrawing small multiple amounts.
  • Visit bank branch for cash withdrawals: If withdrawing large amount of cash, you are better off visiting the bank branch rather than the ATM. Visiting the bank branch may be slightly inconvenient,  but it is a good idea to visit the bank branch to avoid the ATM transaction fee. Having said that, if this type of transaction happens once in a while, no harm in paying the charge versus waiting for your turn at the bank, if that is indeed the case.
  • Use online banking for statement: A lot of people use ATMs for checking their account statement or to get a print of recent transactions or mini statement.  Since ATM transactions count the number of visits even if it was for checking of account statement and not cash withdrawal, it is a good idea to use the internet banking facility for checking of account statement rather than the ATM machine.
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This entry was posted on September 4, 2014 by in Articles, Information & News.

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