Home › Circulars › RBI/2007-2008/260

RBI mandates free ATM use for own bank, caps other bank charges

Current · Source: Reserve Bank of India · RBI/2007-2008/260 · issued 10 Mar 2008 · ~2 min read
Quick answerRBI has directed all scheduled commercial banks to make own ATM use and balance enquiries at other bank ATMs free immediately, cap cash withdrawal charges at other bank ATMs to Rs.20 per transaction from March 31, 2008, and make such withdrawals completely free from April 1, 2009.
The rule, in the simplest words
How it plays out — a real example

Rahul, a branch operations officer in Indore, is happy to inform his customers that they can now use their bank's ATMs for free and check their balances without any charges at other bank ATMs. He also reminds them that cash withdrawals at other bank ATMs will be capped at Rs.20 per transaction until April 1, 2009, after which it will be completely free.

What changed

RBI mandated that banks must offer free use of their own ATMs and free balance enquiries at other bank ATMs with immediate effect. For cash withdrawals at other bank ATMs, banks cannot increase charges beyond the December 23, 2007 level; those charging over Rs.20 must reduce to Rs.20 by March 31, 2008; and from April 1, 2009, such withdrawals must be free. The Rs.20 charge is all-inclusive, with no additional fees.

What it means for you

Banks lose a revenue stream from ATM interchange fees for balance enquiries and own ATM usage, and face a phased reduction in cash withdrawal fees at other bank ATMs. This increases customer convenience and transparency but pressures banks to recover costs through other channels or higher volumes. Banks must adjust their ATM pricing strategies and ensure compliance by the deadlines.

What you must do

Who it affects

All scheduled commercial banks including Regional Rural Banks (RRBs), Bank customers using ATMs for cash withdrawal and balance enquiry, ATM network operators and inter-bank arrangement partners

❓ Common questions

Are there any exceptions to the free ATM usage rule?

Yes, cash withdrawals using credit cards and withdrawals at ATMs located abroad are excluded; banks can set their own charges for these.

What is the deadline for reducing charges to Rs.20?

Banks charging more than Rs.20 per transaction for cash withdrawals at other bank ATMs must reduce to a maximum of Rs.20 by March 31, 2008.

Does the Rs.20 charge include any other fees?

Yes, the Rs.20 charge is all-inclusive; no other charges can be levied under any other head, regardless of the withdrawal amount.

📜 Read the original circular — full text as issued by RBI
Notifications - Reserve Bank of India Skip to main content Selected Selected Change Language हिंदी Search the Website Search Home About Us ▼ About Us Organisation & Functions ▶ Organisation Structure Departments Offices Training Establishment ▶ College of Agricultural Banking Reserve Bank Staff College College of Supervisors RBI's Functions and Working Governors Deputy Governors Executive Directors Communication Policy of RBI Sources of Information ▶ Annual Publications Half-yearly Publications Quarterly Publications Monthly Publications Weekly Publications Occasional Publications SDDS NSDP Data Releases Publications available on Subscription General Information RBI History Museum ▶ The RBI Museum RBI Monetary Museum Notification ▼ Notifications Master Directions Master Circulars Amendment Directions Draft Notifications/Guidelines ▶ Draft Notifications/Guidelines Draft Directions (RE-wise) Index To RBI Circulars Standalone Circulars Circulars Withdrawn Press Releases Speeches & Media Interactions ▼ Speeches Media Interactions Memorial Lectures Podcasts Publications ▼ Biennial Annual Half-Yearly Quarterly Bi-monthly Monthly Weekly Occasional Reports Working Papers Legal Framework ▼ Act Rules Regulations Schemes Research ▼ External Research Schemes RBI Occasional Papers Working Papers RBI Bulletin History DRG Studies KLEMS State Statistics and Finances Statistics ▼ Data Releases Database on Indian Economy Public Debt Statistics Regulatory Reporting ▼ List of Returns Data Definition Validation rules/ Taxonomy List of RBI Reporting Portals FAQs of RBI Reporting Portals Home Notifications Notifications ( 81 kb ) Customer charges for use of ATMs for cash withdrawal and balance enquiry RBI/2007-2008/260 DPSS No.1405 / 02.10.02 / 2007-2008 March 10, 2008 The Chairman / Chief Executive Officer (All Scheduled commercial banks including RRBs) Dear Sir Customer charges for use of ATMs for cash withdrawal and balance enquiry 1. Automated Teller Machines (ATMs) have gained prominence as a delivery channel for banking transacti ons in India. Banks have been deploying ATMs to increase their reach. While ATMs facilitate a variety of banking transactions for customers, their main utility has been for cash withdrawal and balance enquiry. As at the end of December 2007, the number of ATMs deployed in India was 32,342. Commensurate with the branch network, larger banks have deployed more ATMs. Most banks prefer to deploy ATMs at locations where they have a large customer base or expect considerable use. To increase the usage of ATMs as a delivery channel, banks have also entered into bilateral or multilateral arrangements with other banks to have inter-bank ATM networks. 2. It is evident that the charges levied on the customers vary from bank to bank and also vary according to the ATM network that is used for the transaction. Consequently, a customer is not aware, before hand, of the charges that will be levied for a particular ATM transaction, while using an ATM of another bank. This generally discourages the customer from using the ATMs of other banks. It is, therefore, essential to ensure greater transparency. 3. International experience indicates that in countries such as UK, 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 from ATMs managed by non-bank entities. There is also a move, internationally, to regulate the fee structure by the regulator fro m the public policy angle. 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. 4. In view of this, RBI had placed on its website an Approach paper and sought public comments. The comments received have been analysed. Based on the feed back a framework of service charges would be implemented by all banks as under: Sr.No. Service Charges (1) For use of own ATMs for any purpose Free (with immediate effect) (2) For use of other bank ATMs for balance enquiries Free (with immediate effect) (3) For use of other bank ATMs for cash withdrawals • No bank shall increase the charges prevailing as on December 23, 2007 (i.e. the date of release of Approach Paper on RBI website) • Banks which are charging more than Rs.20 per transaction shall reduce the charges to a maximum of Rs.20 per transaction by March 31, 2008 • Free - with effect from April 1, 2009. 5. For the services at (1) and (2) above, the customer will not be levied any charge under any other head and the service will be totally free. 6. For the service number (3) the charge of Rs.20/- indicated will be all inclusive and no other charges will be levied to the customers under any other head irrespective of the amount of withdrawal. 7. The service charges for the following types of cash withdrawal transactions may be determined by the banks themselves: (a) cash withdrawal with the use of credit cards (b) cash withdrawal in an ATM located abroad. 8. Please acknowledge the receipt of the circular. A copy of the circular issued to your branches on this subject may please be submitted to us in due course. Yours faithfully (Arun Pasricha) General Manager 2026 All Months January February March April May June July August September October November December 2025 All Months January February March April May June July August September October November December 2024 All Months January February March April May June July August September October November December 2023 All Months January February March April May June July August September October November December 2022 All Months January February March April May June July August September October November December 2021 All Months January February March April May June July August September October November December 2020 All Months January February March April May June July August September October November December 2019 All Months January February March April May June July August September October November December 2018 All Months January February March April May June July August September October November December 2017 All Months January February March April May June July August September October November December Archives 2016 All Months January February March April May June July August September October November December 2015 All Months January February March April May June July August September October November December 2014 All Months January February March April May June July August September October November December 2013 All Months January February March April May June July August September October November December 2012 All Months January February March April May June July August September October November December 2011 All Months January February March April May June July August September October November December 2010 All Months January February March April May June July August September October November December 2009 All Months January February March April May June July August September October November December 2008 All Months January February March April May June July August September October November December 2007 All Months January February March April May June July August September October November December 2006 All Months January February March April May June July August September October November December 2005 All Months January February March April May June July August September October November December 2004 All Months January February March April May June July August September October November December 2003 All Months January February March April May June July August September October November December 2002 All Months January February March April May June July August September October November December 2001 All Months January February March April May June July August September October November December 2000 All Months January February March April May June July August September October November December 1999 All Months January February March April May June July August September October November December 1998 All Months January February March April May June July August September October November December 1997 All Months January February March April May June July August September October November December 1996 All Months January February March April May June July August September October November December 1995 All Months January February March April May June July August September October November December 1994 All Months January February March April May June July August September October November December 1993 All Months January February March April May June July August September October November December 1992 All Months January February March April May June July August September October November December 1991 All Months January February March April May June July August September October November December Top Back to previous page More Links Bank Holidays Banking Glossary Citizen's Charter Complaints Contact Us COVID-19 Measures E-LMS Events FAQs Financial Education Forms IFSC/MICR Codes Important Websites Opportunities @ RBI RBI Clarifications RBI Kehta Hai RBI’s Vision and Values (1257 kb)--> Right to Information Act Tenders Follow RBI RSS Twitter YouTube Instagram Facebook LinkedIn © Reserve Bank of India. 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Reproduced for reference with acknowledgment — Source: Reserve Bank of India · RBI/2007-2008/260 · issued 10 Mar 2008. The plain-English explanation above is BankPulse’s own independent summary.
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Who does what — compliance checklist
🏦 Branch Manager
  • Immediately implement free own ATM usage and free balance enquiries at other bank ATMs across all branches and systems.
  • Acknowledge receipt of this circular and submit a copy of the branch circular to RBI in due course.
📜 Compliance
  • Review current ATM charges for cash withdrawals at other bank ATMs; cap at Rs.20 per transaction by March 31, 2008, if higher.
  • Plan for complete elimination of cash withdrawal charges at other bank ATMs by April 1, 2009, and communicate this to customers.
  • Ensure no additional charges are levied under any other head for these transactions; the Rs.20 charge must be all-inclusive.
Grouped from the action items above — a single circular may involve more than one team.
Worked example & action-note template

Example: if you are a Branch Manager at a bank this circular applies to (All scheduled commercial banks including Regional Rural Banks (RRBs), Bank customers using ATMs for cash withdrawal and balance enquiry, ATM network operators and inter-bank arrangement partners), your first concrete step on “RBI mandates free ATM use for own bank, caps other bank charges” is: “Immediately implement free own ATM usage and free balance enquiries at other bank ATMs across all branches and systems.” (RBI issued this 10 Mar 2008).

  1. Circular: RBI/2007-2008/260 -- RBI mandates free ATM use for own bank, caps other bank charges
  2. Issued: 10 Mar 2008
  3. Action required: Immediately implement free own ATM usage and free balance enquiries at other bank ATMs across all branches and systems.
  4. Action required: Review current ATM charges for cash withdrawals at other bank ATMs; cap at Rs.20 per transaction by March 31, 2008, if higher.
  5. Action required: Plan for complete elimination of cash withdrawal charges at other bank ATMs by April 1, 2009, and communicate this to customers.
  6. Action required: Ensure no additional charges are levied under any other head for these transactions; the Rs.20 charge must be all-inclusive.
  7. Action required: Acknowledge receipt of this circular and submit a copy of the branch circular to RBI in due course.
  8. Owner: ____________ Target date: ____________
  9. Board/committee approval needed? Y / N
  10. Evidence filed in compliance register on: ____________
Built only from this circular’s own published fields — not legal advice; always confirm against the official RBI source.

💬 Banker Discussion

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BankPulse Compliance Evidence Pack — generated 05 Aug 2026 · status cross-checked against RBI’s official withdrawal register (refreshed weekly).
Official RBI source: https://www.rbi.org.in/Scripts/NotificationUser.aspx?Id=4076&Mode=0 — Plain-English summary by BankPulse (bankpulse.ai), reviewed by our expert reviewer, CA Amit Jain. Independent platform, not affiliated with the Reserve Bank of India; is our own plain-English paraphrase, not RBI’s original wording.
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