RBI clarifies free ATM transactions' issue

The Reserve Bank of India (RBI) clarified that those transactions which fail on account of technical and other specified reasons shall not be included in the ‘five free monthly ATM transactions’.

“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,” the RBI said in a notification.

“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 or wholly to the bank or service provider; invalid PIN or validations; etc., shall not be counted as valid ATM transactions for the customer,” the notification said.

Consequently, no charges shall be levied on these failed transactions, the RBI said.

“Non-cash withdrawal transactions (such as balance enquiry, cheque book request, payment of taxes, funds transfer), which constitute ‘on-us’ transactions, shall also not be part of the number of free ATM transactions,” the notification added.

Challenging a Reserve Bank of India (RBI) circular prohibiting banks and financial institutions from providing services in relation to cryptocurrencies, the Internet and Mobile Association of India (IAMAI) told the Supreme Court that the RBI did not have the authority to place a ban when there was no legislative policy in place for virtual currencies.

“RBI cannot step out of its powers as set out in Banking regulation Act. Therefore, its action against private businesses in the form of a circular is illegal,” IAMAI counsel Ashim Sood said.

The counsel also emphasised that the central bank did not undertake research before issuing the ban. Advocate Sood also informed the court about definitions of ‘virtual currency’ and cited various sources to show that there are many meanings of virtual currency and various types of it. He said that the circular is vague because it does not define virtual currencies.

Indo-Asian News Service