RBI clarifies on Free ATM transactions

Reserve Bank of India on Wednesday (14th August 2019) in its notification to all Scheduled Commercial Banks including Regional Rural Banks, Urban Co-operative Banks, State Co-operative Banks, District Central Co-operative Banks, Small Finance Banks, Payment Banks, White Label ATM Operators clarified that banks should not count failed transactions at ATMs due to technical reasons and balance enquiry as part of the free transactions facility given to a customer.
In India, all banks provide certain number of free transactions at ATMs to their customers and beyond that they impose charges. However, some banks have been including transactions that have failed due to technical reasons, non-availability of currency in ATMs, etc., in the number of free ATM transactions.
In view of criticisms, the banking regulator clarifies that transactions which fail on account of technical reasons like hardware, software, communication issues; non-availability of currency notes in the ATM; and other declines ascribable directly, wholly to the bank, service provider; invalid PIN, validations; etc., shall not be counted as valid ATM transactions for the customer. Since such transactions are not valid ATM transactions no charges shall be levied taking into account of such transactions.
It is further clarified by the Central Bank that the non-cash withdrawal transactions (such as balance enquiry, cheque book request, payment of taxes, funds transfer, etc.), which constitute ‘on-us’ transactions (i.e., when a card is used at an ATM of the bank which has issued the card) shall also not be part of the number of free ATM transactions. So, no charges shall be levied on non-cash withdrawal transactions.