Axis and HDFC Bank to charge their own customers beyond 5 ATM transactions

HDFC Bank and Axis Bank have decided to charge their own customers for more than five transactions at its automated teller machines starting 1 December.

HDFC Bank will charge Rs 20 for financial transactions and Rs 8.5 (excluding taxes) for non-financial transactions (balance enquiry, mini statement, etc).

Axis Bank will charge Rs 20 (excluding taxes) for financial transactions and Rs 9.5 for non-financial transactions.

At ATMs of other banks, the HDFC and Axis Bank customers will be charged for more than three transactions. Earlier, five transactions were free at non-home bank ATMs.

Axis Bank has, however, made 10 transactions free for its Prime Plus Savings Account and Prime salary account holders. These account holders need to have a minimum opening balance of Rs 1 lakh.

For these account holders, first five transactions will be free at non-home bank ATMs.

From this month onwards, State Bank of India — the country’s largest lender — has decided to charge its customers for ATM withdrawals beyond five a month.

Aditya Puri, managing director, HDFC Bank, had earlier told Business Standard that usually a customer did not carry out more than four transactions in a month.

“Banks are commercial organisations. They are entitled to recover their costs. They will charge as long as the charge is not usurious. Our regulators will look at these so that these aren’t excessive,” Puri had said.

Bankers claim that with the increased focus on the digital medium, a lot of transactions in the metro cities are now being carried out via cell phones or online. As a result, the revision in charges are unlikely to have an adverse impact.

Rajiv Anand, president, retail banking, Axis Bank, said with the revision, only 15-20 per cent of their customer base is likely to be affected.

“If we look at the customer behaviour, then about 80-85 per cent of the customers are well within the limit of eight free transactions a month. Therefore, only a very small percentage of customers would be affected.”

He added that the fixed cost of ATMs has also gone up. This will help in addressing the issue as well.

Currently, other private sector banks not charging their own customers for using their ATMs but bankers say that it is a matter of time before other lenders may also follow suit.

Banks, in association with the National Payments Corporation of India, had earlier sent a proposal to the banking regulator to reduce the number of free transactions at non-home ATMs because of the higher cost incurred by them. They had also sought to be allowed to charge their own consumers for the use of ATMs.

According to the Reserve Bank of India guidelines, banks are free to charge their customers after the first five free transactions from November 1.

The hike in charges done by the banks will be applicable to transactions in Mumbai, New Delhi, Chennai, Kolkata, Bangalore and Hyderabad.

As per the RBI data, at the end of June, the number of ATMs in the country stood at 166,894.