You may have to pay for using ATMs more than 5 times a month

You may have to pay for using ATMs more than 5 times a month

mangaloretoday.com

Bangalore, Jan 07: You may be able to use your ATMs only five times in a month for free. This is one of the measures Indian Banks Association (IBA), the umbrella body of the lenders, has proposed after the Bangalore incident involving a woman employee.

Banks will incur a monthly outgo of Rs.4,000 crore due to additional security requirements at ATMs following the recent Bangalore incident and the only alternative for making operations viable is raising user charges, IBA said on Tuesday.

Every ATM will need an additional Rs.40,000 a month on security. There are over 1 lakh ATMs which will need the upgrade, so the monthly outgo for the industry will increase by at least Rs.4,000 crore, IBA chief executive M.V. Tanksale told reporters.

 

Some of the 1.4 lakh ATMs are already manned. He said banks have already resorted to activities like shutting some ATMs in odd-hours, and added IBA has made a representation to RBI for increasing the inter-bank fee from Rs.15 to Rs.18 per transaction and also to scale down the monthly free transactions for a savings bank account holder to five per month.

However, when asked if it has also sought some decision from RBI to charge for every transaction, Tanksale said it would be best to leave it to individual bank.

The IBA, he stressed, has only recommended a change to include all the transactions, including the own-bank ones, to 5 per month and has not suggested any change to the current practice of making an account holder pay Rs.20 per transaction for the excess ones.

Right now, holders of savings accounts enjoy five free transactions per month in other bank ATMs, while there is no cap on own-bank ATM transactions.

Banks net off transactions at the end of the month within themselves and pay Rs.15 per transactions plus taxes to other banks irrespective of whether it was a free transaction or not for the customer.

 

A woman employee of a Corporation Bank in Bangalore was brutally attacked inside an ATM kiosk by an intruder with a machete in November last year. Following the incident, all banks were asked to deploy armed security guards outside all 1.40 lakh ATMs round-the-clock. As this results in additional charges, immediately calls started out for reviewing the charges.

When asked if this will prove to be detrimental factor for the banks’ ATM expansion---they plan to increase the total number of ATMs to 2 lakh in the next six months--Tanksale replied in the negative saying all banks are committed to expanding the ATM network.

More and more people need to use ATMs as we need an average footfall of about 200 per ATM per day, he said.

Meanwhile, Tanksale said the IBA managing committee has zeroed in on a special branding package design for the ’talking ATMs’ to be used by the visually challenged.

{mosimage}On the move of banks acting as insurance brokers, Tanksale said the IBA has sought some clarifications from the RBI like the cap on single-company commissions and induction and training of manpower. We are fine with the arrangement otherwise.

However, IBA is not taking a stance of which route to adopt because the banks already have existing relationships with insurers through joint ventures or for distribution tie-ups, he said.

On the RBI discussion paper on NPA management which aims at early detection and problem solving to avoid stress, Tanksale said the final norms will be out by January 15 after the IBA working group finalises its comments this week.

The RBI’s discussion paper is a welcome step, Tanksale said, adding the accelerated provision for doubtful loans is where the banks need more clarity.

On the issue of wage revisions, Tanksale said the IBA offered a 5 per cent increase on the pay-slip, which the unions spurned. We will be meeting the bank employees again on January 29 to solve the issue and arrive at a consensus, he added.