IBA meet to decide on other ATM withdrawals

MUMBAI: Banks will meet on Friday under the aegis of the Indian Banks��� Association (IBA) to decide on curbs to be placed on withdrawals through third-party ATMs which are currently unrestricted.

Last week, the Reserve Bank of India (RBI) had agreed to a maximum cap on withdrawals from third-party ATMs. The central bank had said banks could place curbs, subject to a minimum of five transactions a month and allow free withdrawals of up to, at least, Rs 10,000 from third-party ATMs. But the regulator has left it to banks to decide on the limits, indicating that this was the minimum level of benefit it expected banks to provide customers.

Speaking on the sidelines of a press meet, Union Bank of India CMD MV Nair, who is also the chairman of the Indian Banks��� Association (IBA), indicated that the matter would be taken up for discussions when IBA���s managing committee meets on August 28.

Banks have sought curbs because after access to third-party ATMs was freed, the size of an average withdrawal from ATMs dropped as customers increased the frequency of transactions, resulting in higher costs for banks.

���RBI has left it to banks to decide on the matter; banks are yet to take a decision,��� Mr Nair said. Earlier in April, RBI had instructed banks to allow ATM users ��� even if they were customers of other banks ��� free access to their ATMs.

While releasing the UBI-backed survey on ���Technology-led transformation of Indian banking��� conducted by the International Institute of Information Technology-Bangalore, which highlighted the impact of core banking solutions (CBS) implementation on the banking sector, Mr Nair outlined the initiatives taken by his bank on the technological front.

The bank has invested over Rs 330 crore in technology during the past five years, and in March 2008, completed 100% implementation of CBS. The transaction banking division, created after CBS implementation, is expected to earn fee-based income of Rs 150 crore this fiscal, Mr Nair said.