R. RAMABHADRAN PILLAI | July 14, 2014 11:58 IST | THE HINDU

Once the security issue is taken up in all earnestness, compelling banks to adhere to strict security measures, the cost of operation of the ATMs is bound to go up.

A move by certain banking channels to impose charges on savings bank account holders of banks on transactions done through ATMs of other banks, has not received the nod of the authorities concerned.

Groups of ATM operators in the private sector are understood to be behind the move to levy charges on every transaction made on ATMs belonging to other banks.

At present, five transactions performed through ATMs of other banks such as balance enquiry and changing of secret identification number are free of charge in a calendar month. The charges levied on the transactions from other ATMs differ with each bank, generally in the range of Rs.10-20 for cash withdrawal and Rs.5-Rs.10 for balance enquiry.

The arrival of white label ATMs, set up by private companies, had changed the scenario with the new players seeking to operate the machines profitably. The number of footfalls is important for the white label ATMs as the concerned bank pay the service charges to the former on the basis of the transactions. The issue is understood to have been discussed by the banks with Indian Banks Association, but no decision has been taken on the issue, according to banking sources.

The cost of maintenance of the ATMs had gone up after the incident in Karnataka in which a woman was attacked at an ATM. The banks were asked to spruce up security by ensuring that the shutters should not be closed and there should be security guards to man the ATMs on a 24-hour basis.

The specification on security has not been made a rule by the banking authorities due to various reasons. Once the security issue is taken up in all earnestness, compelling banks to adhere to strict security measures, the cost of operation of the ATMs is bound to go up.

Significantly, RBI had pointed out in a circular concerning the ATM operation earlier that in countries such as U.K., Germany, and France, bank customers have access to all ATMs in the country, free of charge except when cash is withdrawn from white label ATMs or ATMs managed by non-bank entities.

“The ideal situation is that a customer should be able to access any ATM installed in the country free of charge through an equitable cooperative initiative by banks,” it said.

Source : http://goo.gl/AMIshB