Even after accessing their accounts through automated teller machines (ATMs) of other banks became free for customers, banks had not worked out a uniform rate that they would charge each other for facilitating such a service.
From April 1, customers will no longer be charged for using ATMs of other banks to access their accounts. Until now, banks had been passing on the cost of such a facility to their clients. Lenders entered into bilateral/multilateral agreements or were using National Electronic Fund Transfer (Neft), a means of enabling quick interbank fund transfers, so that their clients could avail of such a facility at a cheap cost.
A number of bankers, private and state owned, yet not finalised a single rate that they would charge each other if customers were to use ATMs of other banks.
So far, banks have not arrived at a uniform rate. Right now different rates are being charged for ATM transactions but eventually they will converge. While lenders such as Kotak Mahindra Bank and Union Bank of India had made access of accounts by other bank ATMs free for their customers, others charged Rs 10-20 for each cash withdrawal transaction and between Rs 4 and Rs 7 for every balance enquiry.
The shift of the onus of payments from client to bank will change the entire ATM strategy of banks, with some viewing their ATM operations as profit centres and others preferring to simply pay a charge to another bank whose ATMs its customers use.
Cash withdrawals will not face tax
CASH withdrawals from bank will not attract tax from Wednesday. This is following abolition of the Banking Cash Transaction Tax (BCTT) in the Union Budget 2008-09. The BCTT was introduced in the Budget 2005-06 with the aim for setting an audit trail and to prevent money-laundering using the banking channels and was applicable in all parts of India except Jammu & Kashmir.
From April 1, customers will no longer be charged for using ATMs of other banks to access their accounts. Until now, banks had been passing on the cost of such a facility to their clients. Lenders entered into bilateral/multilateral agreements or were using National Electronic Fund Transfer (Neft), a means of enabling quick interbank fund transfers, so that their clients could avail of such a facility at a cheap cost.
A number of bankers, private and state owned, yet not finalised a single rate that they would charge each other if customers were to use ATMs of other banks.
So far, banks have not arrived at a uniform rate. Right now different rates are being charged for ATM transactions but eventually they will converge. While lenders such as Kotak Mahindra Bank and Union Bank of India had made access of accounts by other bank ATMs free for their customers, others charged Rs 10-20 for each cash withdrawal transaction and between Rs 4 and Rs 7 for every balance enquiry.
The shift of the onus of payments from client to bank will change the entire ATM strategy of banks, with some viewing their ATM operations as profit centres and others preferring to simply pay a charge to another bank whose ATMs its customers use.
Cash withdrawals will not face tax
CASH withdrawals from bank will not attract tax from Wednesday. This is following abolition of the Banking Cash Transaction Tax (BCTT) in the Union Budget 2008-09. The BCTT was introduced in the Budget 2005-06 with the aim for setting an audit trail and to prevent money-laundering using the banking channels and was applicable in all parts of India except Jammu & Kashmir.
