In August, the Reserve Bank of India (RBI) had asked banks to impose the restrictions on third-party ATM usage from mid-October. The step followed recommendations by Indian Banks’ Association (IBA), an industry lobby.
IBA had submitted its recommendations to the central bank last July citing financial burden on banks due to a large number of third party usage and small-ticket withdrawals, resulting in high interchange expenses for banks.
Going by the IBA guidelines, a savings account holder may get five free third-party transactions a month and could be charged from sixth onwards. However, current account holders might not get any free third-party usage.
The short-lived freedom of using ATMs of other banks, for services like cash withdrawals and account enquiries, without being charged for the same, was brought in force by the RBI on April 1, just over six months back.