Banks may hike ATM charges by Rs6 to beef up security

Banks are likely to hike the charges for ATMs usage by Rs6 per transaction, according to CNBC-TV18.

The proposal comes in the wake of stepped up pressure on banks to improve security in ATMs, after a customer was attacked inside an ATM in Bangalore.

The extra charge would go towards beefing up security.

A woman was brutally attacked inside an ATM booth in Bangalore and the scene was caught on camera. The attacker was seen entering the booth and pulling down the shutter before he repeatedly attacked the woman with a machete.

Since then, several state governments have asked banks to deploy round-the-clock ATM security to avert a repeat of such incidents. Karnakata and Tamil Nadu have set deadlines for banks to deploy security guards outside ATMs while states like Maharashtra have directed banks to install CCTV cameras both inside and outside ATM kiosks.

Banks, already pressed by low margins and rising non-performing assets, say beefing up security at ATMs will add Rs36, 000 per month to the costs of maintaining an ATM while e-surveillance systems will cost an additional Rs15, 000 per kiosk and this will be passed on.

At an average 200 transactions per day per ATM, the cost breaks down to between Rs2.5 and Rs6 per transaction. This will be in addition to the Rs20 per cash-withdrawal charged on using other bank ATMs more than 5 times a month, and the Rs9 charged for other services like balance enquiry.

CNBC-TV18 also reported that banks are looking to stop offering unlimited free ATM transactions, and capping it at 5 per month, even for transactions at ATMs belonging to a customer's bank.

Much will also depend on the Reserve Bank's assessment of need for additional fees to ensure customer safety.