SBI account holder? Know new ATM withdrawal, loan rules kicking in today

SBI will use repo rate as the external benchmark to price all new floating-rate loans for MSMEs, housing and retail loans and credit for medium-sized enterprises from today.

Starting today (October 1), State Bank of India has revised its service charges and also adopted the repo rate as the external benchmark for its floating-rate loans. Here are some of the most important changes that you must know about if you are an SBI customer:

New ATM withdrawal rules

According to new rules, SBI will allow 8-10 free ATM transactions in a month for its customers with average monthly balance (AMB) of up to Rs 25,000 in their savings accounts. For customers with AMB above Rs 25,000, SBI will allow unlimited transactions at its own ATMs. The free limit at other banks' ATMs would remain the same for all customers — three transactions in metro cities and 5 transactions at ATMs in other cities and towns.

Customers who exceed the number of free transactions will have to pay a fee ranging from Rs 5 plus GST to Rs 20 plus GST.

Cardless cash withdrawals at ATMs will be charged at Rs 22 plus GST.

SBI salary account holders will continue to enjoy unlimited free transations at all ATMs.

Cash withdrawal

SBI account holders with AMB of up to Rs 25,000 are allowed two free cash withdrawals at bank branches. Those with AMB between Rs 25,000 and Rs 50,000 will get 10 free cash withdrawals.

Free cash withdrawals for customers with AMB above Rs 50,000:

Above Rs 50,000 and up to Rs 1,00,000: 15 free cash withdrawals

Above Rs 1,00,000: Unlimited

Charges for transactions beyond the free limit Rs 50 plus GST (per transaction).

New loans to be linked with repo rate

SBI will use the repo rate as the external benchmark to price all its new floating-rate loans for micro, small and medium enterprises (MSMEs), housing and retail loans, and credit for medium-sized enterprises from today.

Business Standard

Why finding an ATM in India is getting tougher even as people use them more

India already has the fewest ATMs per 100,000 people among BRICS nations, according to the International Monetary Fund.

Business Standard : Finding an ATM in India is getting tougher even as dependence on cash persists, thanks to tighter regulations that make it more costly to run the machines.

The number of automated teller machines in the country shrank in the past two years despite an increase in transactions, Reserve Bank of India figures showed Saturday. India already has the fewest ATMs per 100,000 people among BRICS nations, according to the International Monetary Fund.

The drop may continue as banks and ATM operators struggle to absorb the cost of software and equipment upgrades mandated by the central bank last year to bolster security. That risks undermining Prime Minister Narendra Modi’s campaign of increasing financial inclusion in a nation where cash remains king less than three years after he pulled most banknotes from circulation.

“Declining numbers of ATMs will impact a large segment of the population, especially those who are socio-economically at the bottom of the pyramid,’’ said Rustom Irani, managing director at Hitachi Payment Services Pvt. Ltd., a provider of the machines. “Penetration in the country is already very low.”

As security costs swell, ATM operators are being squeezed because the fees they rely on for revenue remain low and can’t rise without the approval of an industry committee. ATM operators – which include banks as well as third parties – charge a so-called interchange fee of 15 rupees to the lender whose debit or credit card is used for cash withdrawals.

“Interchange fees are the biggest factor behind muted growth of ATMs. They have to reflect ground reality,” said R. Gandhi, a former RBI deputy governor. “Banks are finding it cheaper to pay interchange fees to other banks rather than operating their own ATMs.”

Yet not everyone agrees that increasing fees is the solution. If they are raised, banks might pass the higher charges on to customers, according to R. Subramaniakumar, chief executive officer at Indian Overseas Bank.

Access to basic financial services including ATMs has become more crucial after Modi added 355 million people to the banking system since taking office in 2014. Many Indians opened accounts when the prime minister made 86% of banknotes illegal in November 2016. That boosted direct transfers of welfare benefits to people’s accounts, increasing reliance on ATMs.

Branch rationalization by some public-sector lenders is another factor behind the drop in ATMs.