Now withdraw Cash for FREE from any ATM!!

All ATM Card Holders please note ........

All ATM Card Users can now withdraw cash from any bank ATM for FREE irespective of the number of transactions and the withdrawal amount. The previously levied fee (usually Rs.20 plus tax) has been waived based in a circular issues by RBI and all banks are to have complied with it by 1st April, 2009.

This is a boon to customers as I experienced yesterday, when I could withdraw money free of transaction carges on my Citibank ATM Card at a Bank of Centurion Bank ATM outside my gate and not have to Drive to the Citibank BKC ATM which is a 5 min drive away. For most of the banked population (except the high net woth guys) the Rs.20 charge for ATM withdrawal does make a difference and customers are unwilling to pay it to access the other banks ATM.

Through this circular, RBI has made life easy for many customers and rubbed the banks the wrong way. While for the customer it is immense convinience, for bank it is an incremental cost anywhere between 30 lakhs to 1 Crore per month depending of the Number of customers and Geographical spread ofthe ATM Network.

Customers should note that very time they use another bank ATM, for e.g. if I withdraw money from the Centurion Bank TM with a Citibank Card, Ciitibank will still have to pay Centurion Bank Rs.20 or so fo the transaction, but Citibank will not be able to pass on that charge to me. Hence no bank will promote this service in a big way - because it directly impacts their bottom lines. However what they will be missing is that this can be converted into an effective acquisition strtegy. Several people preferred ICICI / HDFC over the foreign ones, because of the ATM Coverage (especially my friends in FMCG Sales Profiles, who would love to bank with Citibank / HSBC because of their powerful Internet / Phone Banking platforms). These foreign banks can now turn this RBI Madate on the head and make the most of it and publicise it well ... but it is unlikely to happen as in my opinion they will definitely prefer avoiding a tangible lost rather than invest it in an intangible gain.

However, I would like to salute this move of RBI, who would have taken this decision keeping only the customer in mind even though each and every bank would have opposed this move ..... the good part of it being, it will force the banks to reconsider their ATM strategy and if possible outsource it to a centralised vendor who will manage it across banks ...... which I eventually see resulting in a more efficient ATM banking system in India.