Banks can’t charge customers for failed ATM transactions; non-cash withdrawal transactions also not to be counted
Failed and non-cash withdrawal transactions cannot be counted as valid ATM transactions for the customer. No charges, therefore, shall be levied by a bank, says RBI
In a relief to bank customers, the Reserve Bank of India (RBI) has directed banks to not include transactions that have failed due to technical reasons, and non-availability of currency in ATMs, in the number of free ATM transactions.
Beyond the free transactions per month, banks charge Rs 10-20 per transaction. When the bank counted failed transactions in the free count, the customer exhausted the number ‘free transactions’ and thus had to pay for subsequent transactions even though the failed transactions did not provide any benefit to the customer.
“It has come to our notice that transactions that have failed due to technical reasons, non-availability of currency in ATMs, etc., are also included in the number of free ATM transactions. It is hereby clarified that transactions which fail on account of technical reasons like hardware, software, communication issues; non-availability of currency notes in the ATM; and other declines ascribable directly / wholly to the bank/service provider; invalid PIN/validations; etc., shall not be counted as valid ATM transactions for the customer. Consequently, no charges therefor shall be levied,” the RBI said.
The RBI clarified that non-cash withdrawal transactions (such as balance enquiry, cheque book request, payment of taxes, funds transfer, etc.), which constitute ‘on-us’ transactions (i.e., when a card is used at an ATM of the bank which has issued the card) shall also not be part of the number of free ATM transactions.
From November 01, 2014, banks have offered to its savings bank account holders a minimum number of free transactions at ATMs. Banks offer their savings bank account holders a minimum of five free transactions (including both financial and non-financial) in a month, irrespective of the location of ATMs.
In the case of ATMs located in six metro locations, viz. Mumbai, New Delhi, Chennai, Kolkata, Bengaluru and Hyderabad, banks offer their savings bank account holders a minimum of three free transactions (including both financial and non-financial transactions) in a month.
At any location, other than the six metro locations as above, banks offer the savings bank account holders a minimum of five free transactions (including both financial and non-financial transactions) in a month at other bank ATMs.
Do note that the above prescription of the number of free ATM transactions is inclusive of both financial and non-financial transactions such as balance enquiry.
An ATM is a computerized machine that provides the customers of banks the facility of accessing their account for dispensing cash and to carry out other financial & non-financial transactions without the need to visit a bank branch.
Read the RBI circular here.
Staff Writer
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