August 21, 2009. Banks will again start service charges on inter-bank ATM transactions just a few months after making all inter-bank ATM transactions free of service charges. You will incur these service charges if you make more than 5 inter-bank ATM transactions in a month.

Inter-bank transactions are those in which you make a ATM transaction on a ATM that’s not owned by the bank that issued the ATM card. Inter-bank ATMs are also referred to as third-party ATMs. ATM transactions on a ATM that’s owned by the bank issuing the ATM card will remain free.

All the banks had made inter-bank ATM transactions free in April of this year pursuant to RBI directives.

However according to the Indian Banks Association, the banks have made a proposal to RBI to limit the number of free inter-bank ATM transactions to 5 and RBI has agree to this proposal.

Banks will start levying you these service charges from October of this year. There will be a service charge of Rs. 20 per transaction according to the IBA.

India Today also reports that RBI has put a cap of Rs. 10000 per transaction on transactions involving inter-bank ATMs.

It’s not clear if all the banks will start levying these service charges or only some banks will do so.

One reason for the re-introduction of these service charges could be that banks want to limit the number of transactions which could have risen as a result of making the transactions free in April.

What do you think of banks levying service charges on inter-bank ATM transactions?

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