Tag Archives: ATM

penalty for cash outs in ATMs

RBI has decided to levy a penalty of Rs.10,000/- on any banks in case there is cash out in their ATMs for more than 10 hours in a month.

Scheme of Penalty for non-replenishment of ATMs

Objective of the Scheme

The Scheme of Penalty for non-replenishment of ATMs has been formulated to ensure that sufficient cash is available to public through ATMs.

Effective Date

The Scheme shall be effective from October 01, 2021. Therefore, banks/ WLAOs should put in place a robust system for monitoring the availability of cash in ATMs and ensure timely replenishment to avoid cash-outs.

Condition for counting instances of cash-outs in an ATM

When the customer is not able to withdraw cash due to non-availability of cash in a particular ATM.

Procedure

Banks shall submit system generated statement on downtime of ATMs due to non- replenishment of cash to the Issue Department of RBI under whose jurisdiction these ATMs are located. In case of WLAOs, the banks which are meeting their cash requirement shall furnish a separate statement on behalf of WLAOs on cash-out of such ATMs due to non-replenishment of cash. Such statements shall be submitted for every month within five days of the following month i.e., first such statement for the month of October 2021 shall be submitted on or before November 05, 2021 to the Issue Department concerned.

Quantum of Penalty

Cash-out at any ATM of more than ten hours in a month will attract a flat penalty of ₹ 10,000/- per ATM. In case of White Label ATMs (WLAs), the penalty would be charged to the bank which is meeting the cash requirement of that particular WLA. The bank, may, at its discretion, recover the penalty from the WLA operator.

Administration of the Scheme

The Scheme of Penalty will be administered by Issue Departments of the Regional Offices of the Bank. The Competent Authority to impose penalty will be the Officer-in-Charge of the Issue Department of the Regional Office under whose jurisdiction the ATMs are located. Appeal against the decision of the Competent Authority, if required, may be made by the banks/ WLAOs to the Regional Director/Officer-in-Charge of the Regional Office concerned, within one month from the date of imposition of penalty. As the intention of the Scheme is to ensure replenishment of ATMs in time, appeals would be considered only in cases of genuine reasons beyond the control of bank/ WLAOs such as, imposition of lockdown by the State/ Administrative authorities, strike, etc.

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increase in ATM charges

RBI has vide its circular dated 10th June, 2021 increased the ATM usage charges as follows:

  1. Increase in intercharge fee per transaction from Rs.15 to Rs.17 for financial transactions and from Rs.5 to Rs.6 for non financial transactions across all centres, metros or non metros. This will be effective from 1st August, 2021;
  2. Intercharge fee pertains to the fees charged by the banks to the merchants who processes a credit card or debit card payment.
  3. Usage charges for customers at ATM machines beyond the stipulated free usage from Rs.20 to Rs.21 per transaction;
  4. Customers get 5 free transactions at own ATM and 3 free transactions at other bank ATM. In non metro cities, customers get 5 free transactions at other bank ATMs.
  5. This will come into effect from 1st January, 2022.

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security in credit cards

RBI circular dated 15th January, 2020 enhancing security of card transactions

https://www.rbi.org.in/scripts/NotificationUser.aspx?Id=11788&Mode=0

Over the years, the volume and value of transactions made through cards have increased manifold. To improve user convenience and increase the security of card transactions, it has been decided as under:

a) At the time of issue / re-issue, all cards (physical and virtual) shall be enabled for use only at contact based points of usage [viz. ATMs and Point of Sale (PoS) devices] within India. Issuers shall provide cardholders a facility for enabling card not present (domestic and international) transactions, card present (international) transactions and contactless transactions, as per the process outlined in para 1 (c).

b) For existing cards, issuers may take a decision, based on their risk perception, whether to disable the card not present (domestic and international) transactions, card present (international) transactions and contactless transaction rights. Existing cards which have never been used for online (card not present) / international / contactless transactions shall be mandatorily disabled for this purpose.

c) Additionally, the issuers shall provide to all cardholders:

  1. facility to switch on / off and set / modify transaction limits (within the overall card limit, if any, set by the issuer) for all types of transactions – domestic and international, at PoS / ATMs / online transactions / contactless transactions, etc.;

  2. the above facility on a 24×7 basis through multiple channels – mobile application / internet banking / ATMs / Interactive Voice Response (IVR); this may also be offered at branches / offices;

  3. alerts / information / status, etc., through SMS / e-mail, as and when there is any change in status of the card.

2. The provisions of this circular are not mandatory for prepaid gift cards and those used at mass transit systems.

3. Issuers and card networks may give wide publicity to the provisions of this circular.

4. These directions are issued under Section 10(2) of the Payment and Settlement Systems Act, 2007 (Act 51 of 2007) and shall come into effect from March 16, 2020.

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free ATM transactions

RBI circular dated 14th August, 2019

Usage of ATMs – Free ATM transactions – Clarifications

2. It has come to our notice that transactions that have failed due to technical reasons, non-availability of currency in ATMs, etc., are also included in the number of free ATM transactions.

3. It is hereby clarified that transactions which fail on account of technical reasons like hardware, software, communication issues; non-availability of currency notes in the ATM; and other declines ascribable directly / wholly to the bank / service provider; invalid PIN / validations; etc., shall not be counted as valid ATM transactions for the customer. Consequently, no charges therefor shall be levied.

4. Non-cash withdrawal transactions (such as balance enquiry, cheque book request, payment of taxes, funds transfer, etc.), which constitute ‘on-us’ transactions (i.e., when a card is used at an ATM of the bank which has issued the card) shall also not be part of the number of free ATM transactions.

5. This directive is issued under Section 10(2) read with Section 18 of the Payment and Settlement Systems Act, 2007 (Act 51 of 2007).

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Online frauds in India and Banks’ Negligence

Just little more than a month ago, I received a SMS on my mobile phone warning me of a transaction for USD 85 on Amazon.com. Immediately the same day and within minutes i had sent a mail to the bank whose credit card i was having to block the said transaction and also block my credit card in order to obviate any further transactions. The bank, a leading private sector bank with otherwise impeccable credentials, simply slept on the matter. Alarmed I reminded them by the evening of the fraud that had taking place on my credit card and asking them to do something about it. None. Nope. No reply. By night I was desperate and therefore marked a copy of my mail to the managing director of the famous bank, but again NYET, no reply from them. Then I got wildly desperate and started banging them to respond. In the meanwhile i called their toll free IVRS number and after about 30 minutes was directed to talk to an inexperienced, immature, callous call centre guy who did not understand what the matter was about and kept repeating the instructions placed on his computer screen. Then i shouted BLOCK MY CREDIT CARD, he sufficiently fearful now, sent his problem upwards and finally after about one hour of conversation, got the credit card blocked. Phew!! 

The next day after much banging again, the bank responded by saying that they are giving me temporary credit on my credit card to the extent that was already debited and will look into the problem (typical red tape language). I told them that if they had acted with alacrity then the transaction could have been blocked and the items not shipped at all, if at all they were shipped, because it could have been easily verified that the transaction was not made from my IP address. Dumb, really dumb bankers!!

Which now leads me to a big question – that of increasing frequency of online frauds taking place in India very rampantly these days. These frauds range from skimming the ATM scanner so that when you swipe your ATM or debit card on the machine someone is able to make a duplicate card on the basis of information gathered therein and make fraudulent transactions worth thousands of rupees from customers’ accounts. 

Very recently i had visited my regular ATM from where i take the money. I saw that the ATM was not having any security at all, there were no uniformed, armed security guards at the ATM entrance or anywhere nearby. Most of the times the ATM doors are also freely open with the result that anybody can enter the ATM booth and install skimming machines or equipments without anybody noticing it. No doubt there are CCTV cameras installed but considering the apathy with which government servants do their job (this was a government owned nationalised banks’ ATM) it could be days or months before anyone notices the lapse, if at all anyone notices it. 

This is a pathetic state of affairs and I don’t understand what the RBI or other banks are doing about it. 

Customers withdrawing monies from ATM are at a big risk because banks are least bothered to do even minimum required to protect them from online frauds. I believe only when a politician or his kin loses money will the government or the RBI or the banks act in this regard. 

In the meanwhile the common man has to recite thousands of prayers every time he enters an ATM kiosk to do any transaction. Jai Ho India

 

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Customer Service in ATM transactions

RBI has issued circular dated 1st August 2013 regarding enhancement in customer service in ATM transactions. Some new features have been brought into force in this set of instructions to banks. They are:

1) Message regarding non-availability of cash in the ATM should be displayed prominently in the ATM even before the customer initiates the transaction i.e. before he inserts the card in the slot. Many a times we insert the card in the slot but no money comes out and we have to only guess that there is no money in the ATM – so to avoid the guessing work RBI has mandated that information be prominently displayed at the ATM regarding non-availability of cash. This is a good move by the RBI.

2) The ATM Id should be displayed somewhere on the ATM. This is to facilitate the lodging of grievances by customers quoting the ATM id. In the absence of the ATM id, the customers had to give the address of the ATM where it is located. ATM id makes it easier for the bank to locate the ATM.

3) Banks may pro-actively register the mobile numbers/ e-mail ids of the customers to send out alerts to them. I thought this was essential rather than discretionary so RBI should have insisted on this rather than said “may pro-actively”. Today almost everybody who has a bank account does necessarily have a mobile phone and in most cases also an e-mail id.

4) RBI has introduced the concept of time-out sessions i.e. each transaction will have a time out session where within a stipulated time which will be a reasonable time, the transaction will be timed out and if the customer has not finished the transaction by that time, then he has to afresh initiate the transaction. I feel RBI has to proceed carefully in this direction because many ATM users are senior citizens, ladies, physically or mentally challenged persons or functionally challenged persons for whom carrying out transactions may take some time. Therefore the fixing of time limits for time out sessions should be carefully done and reviewed from time to time. I feel many customers may find this process to be cumbersome if they have to keep on re-entering the transactions again and again.

Other instructions are routine in nature. The copy of the circular can be found at http://www.rbi.org.in/scripts/NotificationUser.aspx?Id=8286&Mode=0

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