Banks yet to finalize uniform rates for free ATM services

By siliconindia   |   Wednesday, 01 April 2009, 19:39 IST
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Mumbai: As per a new directive by the Reserve Bank of India (RBI), banks have to facilitate free access to all automated teller machines (ATMs) for customers from April 1. But banks have not worked out a uniform rate that they would charge each other for facilitating such a service. Until now, customers had been bearing the cost of such a facility. Lenders had entered into bi-lateral or multi-lateral agreements or were using national electronic fund transfer (NEFT) for enabling quick interbank fund transfers, so that their clients could avail of such facility at a cheaper cost. Many private and state-owned bankers are yet to finalize a uniform rate that they would charge each other for customers using ATMs of other banks, reported The Economic Times. "So far, banks have not arrived at a uniform rate," TY Prabhu, Executive Director, Union Bank of India, said. "Right now, different rates are being charged for ATM transactions, but eventually they will converge." While lenders, such as Kotak Mahindra Bank and Union Bank of India, had made access of accounts by other bank ATMs free for their customers, other banks were charging Rs 10-20 for each cash withdrawal and between Rs 4 and Rs 7 for every balance enquiry. "There should be a minimum of 200 hits a day for an ATM to reach a break-even point," said Atul Gautam, general manager of Oriental Bank of Commerce. "Usually, it is possible to achieve 200 hits in residential areas, but that may not be the case in commercial complexes." A senior banker felt, a proper picture on a bank's strategy, in respect of its ATM service, would emerge by the end of April.