Banks Cannot Charge You For these ATM Transactions; Reserve Bank of India Rules You Must Know

Banks cannot include non-cash withdrawal transactions such as balance enquiry, payment of taxes, cheque book request and transfer of funds under free ATM transactions. They also cannot include failed ATM balance enquiry, payment of taxes, cheque book request or funds transfer. As many of you may already know that banks offers a certain number of free transactions at ATMs to their consumers every month and beyond that they charge them.

For the benefit of people, the Reserve Bank of India (RBI) has come out with clarifications on free of cost ATM transactions. Below we have mentioned few important things that you must know about free ATM transactions.

ATM Transactions/Withdrawals Rules

RBI Order:

1. The Reserve Bank of India, in a circular dated 14 August 2019, made it clear that transactions that fail due to technical reasons like hardware, software & communication issues should not be counted as valid ATM transactions for the consumers.

2. All scheduled commercial banks that include regional rural banks (RRB), urban/state/district central co-operative banks, small finance banks, payment banks and white label ATM operators have also been asked not to consider transactions failing due to reasons like invalid PIN & validation among the free transactions allowed to a consumer in a month.

3. Non-cash withdrawal transactions for example - balance enquiry, payment of taxes, cheque book request and funds transfer will also not be part of the number of free ATM transactions, according to the RBI.

4. The RBI added that "Consequently, no charges will be levied on these failed transactions".

5. As per the existing rules, banks offer a certain number of transactions free of cost every month to people. The number of such transactions permitted to the customer every month differs, depending on factors like type - whether the ATM is part of the home bank's ATM - & location of the ATM - whether it is located in a metro city. 

6. For transactions at the ATMs in the network of same bank as the account, the lenders gives a minimum of 5 free transactions in a month.

7. For transactions at ATMs outside the home bank's network but in 1 of 6 metros – Delhi, Mumbai, Chennai, Bengaluru, Kolkata and Hyderabad, they provide a minimum of 3 free transactions in a month.

8. For any transactions at ATMs of other banks outside these metros, a minimum of 5 transactions are given to the customer free of cost.

9. Consumers are charged for transactions at ATMs over & above the mandated number of free transactions. The charges that applicable in case of any transactions above the monthly limit differ from bank to bank.

10. At present, these charges cannot exceed a maximum of Rs. 20 / transaction (plus applicable taxes, if any) by banks, as per the RBI.

State Bank of India currently offers 8 free transactions to regular savings bank account holders, including 5 transactions at SBI ATMs and 3 at other bank ATMs. In non-metros, the account holders get ten free transactions - 5 at SBI ATMs & 5 at others.