New Delhi, January 16: If you were counting days for ATM withdrawal limit to go away post demonetisation, you are in a soup as Modi government is considering a proposal to reduce the free withdrawals to just three from current 8-10 limit, reported Economic Times.
What is even more touchy for Indians who are already reeling under the pressure to go digital is the fact that the decision would affect you even when you withdraw from bank where you have an account.
The bankers proposed this move to boost Digital India drive of government in a pre-budget consultation with the finance ministry.
“A proposal to bring down free ATM transactions to three per month has been discussed with the finance ministry, and this is one of the measures being considered to disincentivise use of cash,” a senior banker said on anonymity.
Road to digital India seems to be building up on curbing cash usage and forcing people to use cards instead. Even two months post demonetisation, cash withdrawal restrictions have not been lifted and economic activities have been hampered immensely due to cash crunch caused after note ban.
With the latest directive, if you withdraw more than 3 times from a bank you would be charged a transaction fee. Besides this, you are currently not allowed to withdraw more than Rs 4500 per transaction which is allowed only once a day.
Since Nov 2014 most banks allow their customers 5 free ATM transactions every month after which a fee of Rs 20 per transaction plus service tax is applied however non-customers get 3 to 5 free transactions. On an average you get 8-10 free transactions every month from ATMs.
While RBI and Finance Ministry seems to be in hurry to push digital but industry experts do not find it a very viable option to curb the ATM transaction for their business. Many banks accepted that ATM transactions have fallen drastically after note ban and further drop will just make ATM business impractical. Till the expiry of demonetisation on December, more than 50 % ATMs were dry due to lack of cash supply or they were not recalibrated yet.
The banker further said, “One can look at increasing transaction charges at ATMs to improve the economics of doing business, but the government wants to reduce transaction cost for customers, so that may not happen.”
Just last week, NITI Aayog CEO Amitabh Kant had said that cards, ATMs and PoS machines would be of no use by 2020. He had said, “…by 2020, my view is that in the next two-and-a-half years, India will make all its debit cards, credit cards, all ATM machines, all POS machines totally irrelevant….India will make this jump because every Indian will be doing his transaction just by using his thumb in thirty seconds.”