ICICI Bank caps free transactions at five for own ATMs, three for others
Moneylife Digital Team 08 December 2014

After exceeding the free transaction limits, ICICI Bank customers will have to pay Rs20 per financial transaction excluding service tax and Rs8.50 for every non-financial transaction


ICICI Bank Ltd, the country’s largest private sector lender, has announced a hike in its automated teller machines (ATMs) charges for savings account holders from 1st January. Under the new method, the number of free transactions in a month is fixed at five using own ATMs, while it has been capped at three for other banks’ machines.
Customers can enjoy only five free transactions, including financial and non-financial, at the bank’s own ATMs, it said in a post on its website.
After exceeding the free transaction limits, customers will have to pay Rs20 per financial transaction excluding service tax and Rs8.50 for every non-financial transaction, it said.
For transactions at non-ICICI Bank ATMs, the number of free financial and non-financial transactions have been reduced to three per month at six metros of Mumbai, New Delhi, Chennai, Kolkata, Bengaluru and Hyderabad, after which the customer will have to pay Rs20 for a financial transaction and Rs8.50 per non-financial transaction.
In case of usage in non-metro areas, a customer can enjoy five free transactions per month at non-ICICI Bank ATMs, after which the same charges apply, it said.
The issue of ATM usage has been a very contentious one due to the inter-connect charges a bank has to pay to the other. Additionally, the operating costs have also gone up, following a spate of incidents at the ATMs like the robbery at Bengaluru last year, which started the debate on transaction charges.
After consultations, the Reserve Bank of India (RBI) last month started a system under which it allowed banks to charge from the fourth transaction onwards at other banks’ ATMs in metros, and gave the liberty to banks to charge customers for the sixth transaction onwards at own machines.
“The ATM transaction is free to you but not free to the bank. It costs the bank Rs75 to Rs100 for those five transactions. The bank has to collect that amount from somewhere and it has to be from customers. But there are two distortions that it creates. First, not everybody is doing the same amount of transactions and (also) are we subsidising using of cash by freeing up ATMs?” RBI Governor Raghuram Rajan had said, in defence of the new move.
Many banks have already announced reviews in their ATM charges following the announcement.
Arun Chokhani
4 years ago
Yes. There must be some method for the sender to identify themselves,or giving some reference about the payment. Eg: municipal tax is permitted by NEFT, but without mentioning “index” number, they’ve no method to identify the sender who may end up being called a defaulter despite their payment.
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