Reserve Bank of India is considering a proposal wherein one will be able to withdraw money from any ATM across India, without being charged extra for withdrawing money from an ATM under which one does not have an account. The scheme is proposed to be in place 2009 onwards.
At present banks charge Rs 50 for a cash withdrawal and Rs 20 for a balance inquiry from an ATM incase one does not have an account in the same bank. The amount being charged is not fixed and may vary from bank to bank.
The move is facing opposition from SBI which has the largest chain of ATMs across India. SBI went down to number 2 spot in Banking sector after ICICI picked the top spot. In a move to regain the top spot and to keep its high-net-worth investors intact, SBI started setting up ATMs across India and made substantial investment in the process. SBI is surely going to get hurt by this move as it will loose its advantage of a big ATM chain.
But for the common man this comes as a sign of relief. One can now go to any nearby ATM and withdraw cash without any apprehensions of the charges being levied. Apart from this, we’ll see queues getting shorter at ATMs.
From the banks’ perspective this will reduce the number of transactions happening and the overhead faced by the bank dealing with these inter bank transactions.
It is imperative for banks, banking on their ATM count, to start looking out for improvement towards the level of service they offer and also innovate fresh banking products to cope up with the burgeoning competition in Banking sector.
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