Moneylife Foundation calls for a round-table discussion on ATMs usage and charges

Moneylife Digital Team 09 September 2014

Moneylife Foundation, as the voice of over 30,100 savers, has sent a memorandum to the RBI and also called for a round-table discussion on 13th September with like minded citizens, activists and NGOs to take up ATM usage and charges issue with the banking regulator

The Reserve Bank of India, on 14th August issued a very anti-consumer directive restricting free usage of automatic teller machines (ATMs) by customers. This is in contrast to its own 5-point consumer charter (CC) that was well appreciated by media and bank customers.

Moneylife Foundation, along with several like minded citizens, activists and non-governmental organisations (NGOs), is protesting RBI's move restricting free usage of ATMs by bank customers.

Moneylife Foundation also sent a memorandum to RBI governor Dr Raghuram Rajan, requesting him to restore unlimited usage of ATMs by banks to their own customers, restore differential pricing for cash and non-cash transactions at ATMs and introduce a system of reporting out of order ATMs for customers.

In addition, Monelife Foundation has called for a round-table discussion on this issue at Moneylife Foundation Knowledge Centre at Dadar in Mumbai on 13 September 2014 between 2.30pm to 4.30pm. All citizens, activists and NGOs who wish to be part of this discussion and take this forward are invited to join the round-table. There is also a need to write to the RBI that any directive that leads to increased costs to the depositor must be discussed with bank customers, the largest stakeholders.

Currently, banks have the freedom to decide their charges and interest rates without reference to RBI. So, if some banks found it prudent to curb usage or disallow third-party transactions, they could have gone ahead and done it without RBI’s intervention. So why the RBI directive? To make an anti-consumer action look like a regulatory diktat?

The Indian Bank's Association (IBA) used its influence on the central bank to ensure that angry customers do not vote with their feet and switch banks. Getting RBI to issue a directive removes the problem.

It also ignores the fact that IBA behaves like a cartel under RBI’s benign watch. That is how all banks act together to charge for mobile texts and debit cards and ensure that interest on savings bank deposits remains a low 4% at all but a couple of new banks.

In addition, what about ATMs that are not functioning thus making people to hop around and use other bank's ATM that is working. Another crucial issue is the restriction on money withdrawal. If someone needs, lets say Rs25,000, and the ATM has withdrawal limit of Rs10,000. In this case, the person would end up making all three permitted transactions there only.

Here is a link to our story on ATM charges: The RBI's ATM usage rule flies in the face of its own Consumer Charter

Comments

User

arun adalja

1 decade ago

very good move by moneylife and all must support the move and oppose the rbi decision and compell to cancel the order.

Gopalakrishnan T V

1 decade ago

The demand of depositors is genuine.They keep their hard earned savings with banks at 4% rate of interest and banks lend these money at around 14%.The advances turn NPAs and depositors and other tax payers are made to bear the losses.The techonology invasion has helped the banks to reduce the cost of funds and if at all their cost of funds is on the high side it is due to their mismanagement and inefficiency and this cannot be passed on to the depositors for withdrawing their money. It is atrocious and banks cannot justify this. The round table conference arranged by the Money Life on the topic is welcome and IBA which is also a party to banks' non professionalism and exploitative attitude to charge the helpless depositors for anything and everything should be made to make its stand clear on the matter. RBI being the regulator of banks and knowing the in and out of banks' way of functioning and incurring losses on account of staggering NPAs, resorting to heavy borrowings to substitute deposits, poor professionalism in managing the Asets and Liabilities of banks etc cannot simply allow the banks to charge the depositors for covering their inefficiencies. The round table conference being convened at the initiative of Money Life can definitely sort out the issues arising out of the proposed move to Charge the depositors for their withdrawals of mooney through ATM.It is good that Money Life fights the issue on behalf of depositors. Even the issue of NPAs needs to be openly fought by all stakeholders of banks particularly depositors and tax payers.