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Showing posts from July 16, 2009


History of free ATM usage

Before April 1, 2009, if you had to use the ATM of any bank with whom you don't have any banking relationship, you ended up paying fees. It meant you had to find the closest ATM belonging to your bank to withdraw cash and make balance inquiries. So RBI introduced a directive to the banks to allow free use of ATM machines irrespective of which bank a customer had accounts with.

This meant that irrespective of which bank you bank with, you could use any other bank's ATM free of cost. However the banks were only to charge for the cash withdrawal made by the customers by using their credit cards, while cash withdrawal on debit card was made free. So with effect from April 1, 2009, you could withdraw cash from any ATM free of charge.

Banks make a loss

However, this has not worked out in the favour of banks. Earlier when the use of ATM was not free, the interchange fee was borne by the customers. This fee covered the expenses incurred by both the concerned bank…