Tips to use your ATM effectively!

By | November 5, 2014


From facing the long peak hour traffic to pollution galore and a generally stressful life, residents of metropolitan cities now have another thing to worry about. Residents of six metropolitan cities would now have to check their monthly ATM transactions as the Reserve Bank of India has issued new guidelines for ATM usage which effectively limit the number of free monthly ATM transactions.  The good news however is that the banks including both public and private sector banks are yet to embrace the new ATM guidelines and are offering free ATM transactions as before.

While banks are holding off the revised ATM transaction charges for now, it may not be long where some banks start adopting the new guidelines limiting the number of free ATM transactions. So, if you are one of those, using bank ATMs for frequent cash withdrawals, it’s time to change your habit for good to avoid any unnecessary charges.

Understanding New RBI ATM Transaction Rules:

According to the Reserve Bank of India guidelines, all savings bank account holders in metropolitan cities would be allowed five transactions from ATMs of their banks inclusive of cash withdrawals, mini statement and change of personal identification number or PIN number or balance enquiry. The RBI guidelines though initially restricted free transactions to three per month when using ATMs of other banks effect from 1st November 2014, later there was a relaxation to the policy allowing banks to fix their stipulated free ATM transactions. Since RBI has indicated that it has laid down guidelines for minimum free ATM transactions per month for people living in six metropolitan cities including Mumbai, Delhi, Bengaluru, Chennai, Hyderabad and Kolkata, the final decision on decided the upper limit in the number of free bank ATM transactions lie with the respective banks. The number of free transactions from non-home ATMs is also reduced to three.

Restricting ATM Usage to Increase Bank Footfall and Online Transactions:

ATMs were introduced in an attempt to ease the footfall and rush in the banks allowing people an effective and easy way to withdraw and deposit cash. Now with the free ATM usage restrictions being streamlined, experts feel that it would mean going to the olden days when banks were crowded and even a small banking transaction like withdrawing money would mean visiting the bank branch and standing in a queue, especially the middle aged individuals and seniors are reluctant to use online medium.  On the other hand with banks churning out high expenses for managing their ATMs across the country by employing security guards and security cameras and other expenses to avoid theft and robbery attempts, limiting the number of free transactions may not entirely be an unjustified move, and banks will have to release part of this burden to users.

Banks Move:

Following the guidelines SBI has announced their decision to levy charges for above 5 ATM usages a month, while the charges are not revealed. Other banks in both the public and private sectors are still to make decisions regarding this and are in a wait-n-watch mode. Though they are yet to make a decision on the fee, banks are likely to adopt a decision soon and reviewing the patterns, as they have the permission from RBI and also as an attempt to balance the expenses they are facing in maintaining ATMs. Compared to private sector banks, the public sector banks are likely to come up with quick decisions in this regard, as already some banks like the Bank of India has commented about this to media. But some sources reveal that HNI clients of banks may be freed from this charging.

A Little Care to Save:

Forthe metroites it is time to change their ATM usage habit as sooner or later the banks may embrace the new RBI guidelines. Here are some tips for individual account holders to minimize their bank ATM usage and avoid payment on an ATM usage fee for exceeding the free usage limit.

Restrict ATM usage: A lot of people visit the ATM located outside their bank branch for cash withdrawals. If you are having this habit for convenience, or if other bank ATM is located close to your office, it is time to change your way. Also, next time when you are about to withdraw a good chunk of money, use the teller’s service inside the branch instead of ATM.

Do not use ATM for mini statement or balance enquiry: Many people have the habit of using ATMs for checking the account balance or getting access to their account mini statement while on the go. And there can be many unwanted visits, especially if you have an ATM close to your office. While technology is making a convenient checking option at your finger tips, using Smartphones and tablets, isn’t it sensible to acoid this old habit? Instead of checking statement or account balance from an ATM get access to online or mobile banking for getting a complete insight into your account. People using Smartphone can install the official bank application of their bank and check their account balance and statement while on the move.

Avoid cash transactions: Prevention is better than cure goes the famous saying. Try avoiding cash transactions wherever possible. Opting any from the multiple other methods of payments like using credit cards, debit cards, cheque or NEFT to make sure you limit the number of ATM transactions per month.

Withdraw higher quantum of cash per ATM visit: If you are one of those withdrawing small amount of cash per each ATM visit, it time to change the habit for good. Make sure you withdraw substantial amount for every ATM transaction so as to limit your frequent ATM visits. Since the number of free ATM transactions is limited to five per month for the home bank branch, it is a good idea to withdraw enough cash from the ATM that can manage your financial needs for at least a week.


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Abhishek is responsible for’s Business Operations and Partner Management activities. Abhishek has a Master’s degree in Business Administration from S.P. Jain Institute of Management & Research and is a University rank holder in Engineering from Punjab Technical University. Prior to joining BankBazaar, Abhishek worked with the retail banking division of ICICI Bank and was handling diverse functions like Sales Operations, Customer Relationship Management and Cash Management, along with coordinating best practice projects like 5s,Six Sigma etc. Abhishek is also a green belt trained in 6-Sigma from KPMG and has a number of certifications from NSDL.

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