Some rules of financial services like transaction charges after exhausting free cash withdrawal limit on ATM, the minimum account balance in a bank account may be changed from July 1.
Finance minister Nirmala Sitharaman on 24 March had announced a number of relief measures, in view of the COVID-19 pandemic, including the waiver of withdrawal charges across ATMs. But the waiver period ends today. We remind you about the charges that will be reinstated.
Sitharaman had clarified that debit cardholders, who withdraw cash from any bank’s ATM can do it free of charge for three months following the announcement.
“The transaction fee waiver on debit card usage for ATM transaction for three months was a welcome move, as it encouraged customers to withdraw cash from their nearest ATM. But we are not sure if the same would be extended,” said Rustom Irani, managing director, and chief executive officer, cash business, Hitachi Payment Services.
Normally, banks allow up to five free transactions per month at their own ATMs and three free transactions at other banks’ ATMs. Beyond this, you are likely to be charged a fee for every transaction, which can range between ₹8 and ₹20.
The reason this charge is levied is that every time you make a transaction at an ATM that does not belong to your card-issuing bank, the bank has to pay an interchange fee to the bank or company that operates the ATM from which the withdrawal has been made.
But according to K Shrinivas, director, Confederation of ATM Industry, despite the waiver, ATM transactions have suffered because of the lockdown and continue to do so. “While the lockdown is gradually getting lifted across the country and the economic activity is slowly picking up momentum, we are yet to see ATM transactions come back to the pre-COVID-19 levels. Daily data published by RBI suggests that ATM transactions are at least 30% lower than daily volumes of the pre-COVID-19 period. It could be a long time before complete normalcy is restored,” he said.
Another important announcement Sitharaman had made in March was the suspension of the minimum balance requirement fee in bank accounts. Most banks demand a minimum balance requirement from an account holder and non-maintenance can attract a penalty.
The minimum balance requirement can range from ₹5,000-10,000, or go even higher for premium accounts. The waiver of the minimum balance charge was also for three months and effectively ends today. So if your account balance has dipped below the requisite levels unnoticed, you can be charged a penalty.
If you are planning to make a last-minute ATM run, keep in mind that these charges are not particularly high, although they do add up over time. Since most people have been making fewer trips to the ATM, chances are you will not be shelling out huge amounts as withdrawal charges. But do remember to check your account balance to make sure you are not slapped with a penalty.