Regulating ATM charges in India

RBI had issued a discussion paper in December 2007 to regulate ATM charges in India.

The proposals were mostly accepted by the banks and the public. RBI has issued a circular summarizing the public and Banks’ comments and proposing the changes. As below table shows, there are hardly any changes:

Service Discussion Paper Proposals Circular Proposals
For use of own ATMs for any purpose Free Free (with immediate effect)
For use of other bank ATMs for balance enquiries Free Free (with immediate effect)
For use of other bank ATMs for cash withdrawals 1. No bank shall increase the charges prevailing as on 12/23/2007 1. No bank shall increase the charges prevailing as on 12/23/2007
2. Banks which are charging more than Rs.20 per transaction shall reduce the charges to Rs.20 per transaction by March 31, 2008 2. Banks which are charging more than Rs.20 per transaction shall reduce the charges to Rs.20 per transaction by March 31, 2008
3. Free – with effect from April 1, 2009 3. Free – with effect from April 1, 2009

The Indian Bankers’ Association/Banks had also proposed the following:

1. Cash withdrawal at point of sale
2. third party advertising at ATMs for more revenue streams for banks
3. White label ATMs be allowed.

RBI hasn’t permitted any of the three . But what do you mean by White label ATMs?

White Label ATM (or no name) are ATMs run by independent operators and not financial institutions. These are put at non-traditional places and have no bank label on the machines. They charge the customers an added fee to use these ATMs.

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