Cash withdrawal from ATMs to be free

Banks will now have to make withdrawals from ATMs free of charge for their own customers. Requests for balance enquiries would have to be made free to customers of other banks as well. In a draft circular, the RBI has asked banks to implement these changes with immediate effect. For use of other bank ATMs for cash withdrawals, the RBI has asked banks not to charge more than Rs 20 with effect from March 31, 2008. This will also gradually be made free of charge by April 1, 2009. According to the RBI, some banks had suggested that instead of making the service totally free, number of free withdrawals in a quarter or a month can either be prescribed or left to individual banks. IBA had also suggested that the number of free transactions at ATMs of other banks be restricted to two per month. The RBI has, however, said that a cap on the number of free cash withdrawals in a month is neither desirable nor practical.