Customers can avail themselves of unhindered, free third-party ATM transactions for some more time despite the Reserve Bank of India capping such deals at a maximum of five per month.
Reason: To implement the cap, banks will need to make various technological changes in the machines and that will take quite some time.
Sources said the Indian Banks' Association had tentatively decided to bring the modified rules into force from October 15 this year. However, bankers said they would require at least two-three months to prepare for the modifications. The matter is likely to be taken up on Friday at the managing committee meeting of IBA in Mumbai.
"Banks will have to make modifications in their ATM operations so that every time a user exceeds his quota of five transactions, an alert is conveyed to him. For subsequent transactions, the interchange fee will be debited from the user's account. Banks are not yet ready for these modifications and will take some time to make the necessary technological changes," said a senior executive of a bank.
Technically, banks are allowed to impose the cap on free third-party transactions since they have the permission of RBI. But they will only do so once IBA finalises guidelines for the same.
"A lot of preparations will have to be made. Apart from the technological changes, customers will have to be intimated at least one month in advance. Banks will take a minimum of two-three months to implement these rules," said a senior executive of a private sector bank.
From April 1 this year, RBI had allowed free use of third-party ATMs. However, following a surge in third-party transactions, banks had petitioned RBI to put a cap on the number of such deals, which the central bank recently agreed to.
Accordingly, RBI capped free third-party ATM withdrawals to five per month and fixed an upper withdrawal limit of Rs 10,000 per transactions. It also agreed to banks imposing a charge on withdrawals carried out through current accounts. However, a suggestion from IBA to put a floor on third-party transactions was struck down by RBI.
