Know about ATM Types & RBI’s Circular on Free ATM Transactions

In this article we would explore one of the important topics of Banking Awareness that is ATM Types and also types of ATM Transactions. We would also try to learn and understand what the RBI has conveyed and mandated in its circular regarding Usage of ATMs and Free ATM transactions. Banking Awareness is an important component of General Awareness section of various Banking Exams like IBPS PO, IBPS Clerk, IBPS RRB PO, IBPS RRB Clerk, SBI PO, SBI Clerk as well as NABARD Assistant, NABARD Grade A & B, RBI Grade B etc. Let us begin.

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What is an Automated Teller Machine (ATM)?

An Automated Teller Machine (ATM) is an electronic banking outlet or electronic telecommunications device that enables users/customers to access their Bank Accounts and complete their financial transactions like cash withdrawal, cash deposits, transfer funds, and or obtaining their account information. These ATM transactions are performed with the help of a magnetically encoded plastic card (ATM Card or Debit Card) and a code number on it. 

Services Offered at an ATM

  1. Cash Withdrawal
  2. Checking Account Balance
  3. Open a Fixed Deposit
  4. Recharge your Mobile
  5. Pay Income Tax
  6. Deposit Cash
  7. Pay Insurance Premium
  8. Apply for Personal Loan
  9. Transfer Cash
  10. Pay your bills
  11. Book Railway Tickets

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Types of ATM Transactions

There are two types of ATM Transactions – Financial & Non-Financial Transactions. 

Financial Transactions – The ATM transactions that are measurable in terms of money. 

Non-Financial Transactions – The ATM transactions that do not carry monetary value are non-financial transactions. 

Financial Transaction

Non-Financial Transaction

Cash Withdrawal Balance Inquiry
Cash Deposit Updating Details
Fund Transfer from a Bank Account to other Change of Pin
Viewing Mini Statement
Cheque Book Request

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RBI Rules for Banks with regards to Free ATM Transactions

Usage of ATMs – Rationalisation of Number of Free Transactions

The number of Free Same Bank ATM Transactions & Other Bank ATM Transaction

  • Banks must offer to its savings bank account holders a minimum number of free transactions at ATMs as under: 
  • Transactions at a Bank’s Own ATMs at any other Locations other than a Metro City: Banks must offer their savings bank account holders a minimum of 5 Free Transactions (Including both Financial & Non-Financial Transaction) in a month. (also 5 Free Transactions at other Banks ATMs, so total 10 Free Transactions).
  • Transactions at a Bank’s Own ATMs in a Metro City: Minimum of 3 Free Transactions at Banks own ATMs in Metro locations viz. Mumbai, New Delhi, Chennai, Kolkata, Bengaluru and Hyderabad. (also 3 Free Transactions at other Banks ATMs, so total 6 Free Transactions).

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RBI’s Circular Dated 14th of August 2019

RBI’s Mandate as per circular regarding “Usage of ATMs – Free ATM transactions” 

1. It has come to the notice of RBI that transactions that had failed due to technical reasons, non-availability of currency in ATMs, etc., were also included in the number of free ATM transactions.

2. Therefore it was clarified that transactions that fail on account of technical reasons like hardware, software, communication issues; non-availability of currency notes in the ATM; and other declines ascribable directly / wholly to the bank / service provider; invalid PIN / validations; etc., shall not be counted as valid ATM transactions for the customer. Consequently, no charges therefor shall be levied.

3. Non-cash withdrawal/Non-Financial transactions (such as balance inquiry, cheque book request, payment of taxes, funds transfer, etc.), which constitute ‘on-us’ transactions (i.e., when a card is used at an ATM of the bank which has issued the card) shall also not be part of the number of free ATM transactions.

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ATM Types

1. White Label ATM

  • ATM machines set up, owned and operated by non-bank entities are called White Label ATMs (WLA).
  • WLA are authorised under the Payment & Settlement Systems Act, 2007, by RBI.
  • These White Label ATMs will not display logo of any particular bank. 
  • The first White Label ATM in India was set up by Tata Communication Payment Solution Limited, under the brand name of IndiCash. 

2. Brown Label ATM

  • The Automated Teller Machines (ATM) in which the hardware of ATM machine is owned by the service provider but the cash management and connectivity with the Banking network is provided by the Sponsor Bank. 
  • The Brown Label ATMs have come up as an alternative between Bank based ATMs & White label ATMs. 

3. On-Site ATMs

ATMs that are located inside/besides/just outside the premises of Bank branches are called On-site ATMs.

4. Off-Site ATMs

The ATM machines that are located away from the Bank branches are Off-site ATMs.

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5. Work-site ATMs

ATMs that are located inside the premises of any organisation is called Work-site ATMs.

6. Green Label ATMs

ATMs which are dedicated to promote agriculture banking transactions are called Green Label ATMs.

7. Pink Label ATMs

The ATMs that are dedicated to promote Banking Transactions by Women are Pink Label ATMs.

8. Mobile ATMs

ATMs that are not stationary and can relocate from one place to another are called Mobile ATMs. These are mostly installed on a vehicle. 

ICICI bank was the first bank in India to start a Mobile ATM facility.

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You can also refer to the below given Video by our GA Expert Aditya Sir to understand all the above facts and information and much more in an interactive way.

This was all from us in this blog of ATM Types, ATM Transactions & RBI notification regarding the free number of ATM transactions per month. Stay tuned to Oliveboard for more.

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