Banks to rethink fee on ATM use

Banks and the Indian Banks’ Association (IBA) will take a fresh look at the proposed levy on transactions done by customers at their own banks’ ATMs.

This was one of six action points mooted at a recent annual Banking Ombudsmen conference.

In order to provide enhanced security at ATMs, banks plan to cap the number of free ATM transactions to five a month, irrespective of whether customers use their own bank or another bank’s ATMs.

RBI Deputy Governor KC Chakrabarty had said it would be unfair to charge customers transacting at their own bank’s ATMs.

The practice of levying a penalty for non-maintenance of a minimum balance in ordinary savings bank accounts was also discussed at the conference. Henceforth, banks may consider converting such accounts into Basic Savings Bank Deposit accounts. The IBA may issue instructions to discontinue levying a pre-payment penalty on all floating-rate loans.

Further, it has to ensure that fixed rate loans are truly fixed and not referenced to any floating rate benchmark.

E-banking transactions Banks and the IBA will also formulate a policy on zero liability of customers in electronic banking transactions, when a bank is unable to establish customer-level negligence.

The onus of proving customer-level negligence would be on the bank and when such negligence is not established beyond doubt, the benefit of such doubt may be given to the customer.