Customers in cities near metros too face curbs on free ATM usage

Bank customers living in areas adjoining the six metros — Mumbai, New Delhi, Chennai, Kolkata, Bangalore and Hyderabad — will be disappointed with the new restricted free monthly ATM usage regime, which came into force from November 1.

Banks have included cities and towns lying on the outskirts of the six metros as part of the metros and rationalised the number of free transactions (from five to three a month) for their customers at other bank ATMs at these locations.

For example, areas abutting Mumbai – Thane and Navi Mumbai; New Delhi – Gurgaon, Faridabad, Ghaziabad and Noida; and Kolkata – Howrah, North Paraganas and South Paraganas are now treated by banks as part of the metros.

According to a senior official at the Union Bank of India, the Indian Banks’ Association has circulated to banks a list of postal pin codes, which fall under the jurisdiction of the six metros, for the purpose of determining the applicability of three free monthly transactions for customers at other bank ATMs.

The reason given by bankers for limiting the number of free ATM transactions at other bank ATMs is that the rapid urbanisation of areas adjoining metros has lead to banks spreading their ATM network to the fringes of metros.

At a joint meeting of bankers it was agreed that the ideal way to arrive at specific and definable boundaries (for the purpose of determining metro jurisdiction) is to have a distinction at the postal pin code level. This is aimed at avoiding any ambiguity between banks.

Given that a significant customer base of all banks daily commutes to and fro from these adjoining areas to the metro locations, having differential rules within this geography could create confusion among customers. Hence, the need for uniformity of rules across the geography, said the banker quoted above.

According to the RBI notification, the reduction in the number of free transactions is, however, not applicable to small / no frills / basic savings bank deposit account holders who will continue to enjoy five free transactions, as hitherto. Further, at other locations, the present facility of five free transactions for savings bank account customers shall remain unchanged. Beyond the free monthly ATM transaction limits, the RBI-prescribed ceiling/ cap on customer charges of ₹20 a transaction (plus service tax, if any) is applicable.

The RBI has advised banks that at least five free transactions (inclusive of financial and non-financial transactions) a month should be permitted to savings bank account customers at own bank ATMs at all locations.

Bankers say there is lack of clarity as to whether a customer who has exhausted three free transactions in a metro can take advantage of two more free transactions at a non-metro and vice-versa.

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