In the hustle and bustle of city life it is not uncommon for many to forget refilling cash in their wallet before they step out of their homes, for work place or for any other reason. Earlier, in the era prior to plastic money, while one have regretted and be inconvenienced by such a forgetful act; today, with advancement of technology facilitating e-transactions, getting cash or transacting isn't troublesome, with plastic money (such as credit and debit cards) in one's wallet - which is widely accepted. But then there are one-off occasions where you need cash and plastic money (using debit or credit cards) just won't be accepted. In such cases you visit your nearest Automated Teller Machine (ATM) to withdraw cash (mainly by using your debit card as using credit card could prove costlier).
However, you need to be careful while withdrawing money from an ATM of a bank which is not the one where you have your account. This is because of the allied fees of withdrawing from other bank ATMs. It is noteworthy that earlier Reserve Bank of India (RBI) had stated that only 5 transactions per month would be allowed to a customer from an ATM of a bank where the customer does not have an account. This turns out to be an irritant, if one was unable to find his / her bank's (where you have an account) ATM for urgent requirement of cash and more specifically when one exceeded the monthly limit of 5 transactions in a month, as such transactions over the permissible limit made one bear the cost as high as Rs 20 per transaction.
Citing this anomaly in charging customers after 5 free transactions from another banks' ATM in a month and in a bid to increase financial inclusion, the Finance Ministry is now pushing for lower third-party ATM charges. The Finance Ministry is soon going to take this issue with the state-run banks to lower their charges. This move has come days after the ministry asked Public Sector Unit (PSU) banks to shift to electronic fund transfer and not charge any levy on transactions upto 1 lakh on the National Electronic Funds Transfer system, a proposal that has not gone down well with the RBI. The ministry feels that once the government shifts to direct transfer of benefits, the number of transactions in the no-frills accounts will increase, making them more viable. In such a situation, the ministry feels, the higher volume of transactions will justify lower charges. The Finance Ministry has directed all state-run banks to ensure that every household has one savings account by June end - a move which is a precursor to direct transfer of benefits under Government's financial inclusion plan.
We are of the view that the agenda of financial inclusion is well pursued by the Finance Ministry, although the central bank is discomforted with the move. Yes, indeed one could witness more no-frill accounts being offered by bank, making it a more viable proposition.
As far as charges for withdrawal of cash from ATMs, of a bank other than the one in which holds an account is concerned; we think that there should no restrictions on the number transaction a customer does, and therefore no charged should be levied. ATMs of banks too should be located in strategic areas, considering demographic advantage for respective banks, thus helping them to offer better service and thereby build brand equity. Both private and public sector banks, should together plan out the location of their respective ATMs in different areas in order to have substantial coverage over the entire country and achieve the mandate of financial inclusion.
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