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ATM use over 5 times per month will attract fee of Rs 20 from 1st November 2014

Using ATMs to withdraw money or for other purposes like balance enquiry beyond five times in a month will attract a levy of Rs 20 per transaction from 1st November 2014.

As per the Reserve Bank’s new guidelines that comes into force from Saturday, bank customers in six metros — Delhi, Mumbai, Chennai, Kolkata, Hyderabad and Bangalore — are allowed to withdraw money and/or carry out non-financial transactions like mini-statements at ATMs of banks, where they hold saving/current accounts, free of charge only five times a month.

Every transaction beyond this threshold will be charged Rs 20 per use.

Besides, the number of free transactions at ATMs (Automated Teller Machines) of non-home banks has been cut to three times a month from five times.

“Taking into account the high density of ATMs, bank branches and alternate modes of payment available to customers, the number of mandatory free ATM transactions for savings bank account customers at other banks’ ATMs is reduced from the present 5 to 3 transactions per month (inclusive of both financial and non-financial transactions),” RBI had said in a notification issued in August this year.

The RBI, however, clarified that nothing precludes a bank from offering more than three free transactions at other bank ATMs to its account holders if it so desires.

The cap in the number of free ATM transactions will not apply on small/no-frills or basic savings bank deposit account holders who will continue to enjoy five free transactions.

At places other than the six metro centres, the facility of five free transactions for savings bank account customers will remain unchanged upon using other bank ATMs.

India has a total of 1.6 lakh bank ATMs across the country as of March 2014.

The new guidelines were issued in pursuance of a representation made to the RBI by Indian Banks’ Association on the back of growing cost of ATM deployment and maintenance incurred by banks as well as rising interchange outgo due to free transactions.

Source: The Economic Times

RBI simplified KYC (Know Your Customer) for Bank Customers

The Reserve Bank of India released a note along with a poster and a booklet comprising a few common questions relating to Know Your Customer (KYC) norms for opening bank accounts. The objective of this is to bring awareness among the general public about the KYC simplification measures taken by the Reserve Bank in the recent times with a view to help the common man in opening bank accounts.

Measures taken for simplification:

1. Single document for proof of identity and proof of address

There is now no requirement of submitting two separate documents for proof of identity and proof of address. If the officially valid document submitted for opening a bank account has both, identity and address of the person, there is no need for submitting any other documentary proof.

Officially valid documents (OVDs) for KYC purpose include: Passport, driving licence, voters’ ID card, PAN card, Aadhaar letter issued by UIDAI and Job Card issued by NREGA signed by a State Government official.

To further ease the process, the information containing personal details like name, address, age, gender, etc., and photographs made available from UIDAI as a result of e-KYC process can also be treated as an ‘Officially Valid Document’.

2. No separate proof of address is required for current address

Since migrant workers, transferred employees, etc., often face difficulties while submitting a proof of current address for opening a bank account, such customers can submit only one proof of address (either current or permanent) while opening a bank account or while undergoing periodic updation. If the current address is different from the address mentioned on the proof of address submitted by the customer, a simple declaration by her/him about her/his current address would be sufficient.

3. No separate KYC documentation is required while transferring accounts from one branch to another of the same bank

Once KYC is done by one branch of the bank, it is valid for transfer of the account to any other branch of the same bank. The customer would be allowed to transfer her/his account from one branch to another branch without restrictions and on the basis of declaration of his/her local address for communication.

4. Small Accounts

Those persons who do not have any of the ‘officially valid documents’ can open ‘small accounts’ with banks. A ‘small account’ can be opened on the basis of a self-attested photograph and putting her/his signature or thumb print in the presence of an official of the bank. Such accounts have limitations regarding the aggregate credits (not more than Rupees one lakh in a year), aggregate withdrawals (not more than Rupees ten thousand in a month) and balance in the accounts (not more than Rupees fifty thousand at any point in time). These small accounts would be valid normally for a period of twelve months. Thereafter, such accounts would be allowed to continue for a further period of twelve more months, if the account holder provides a document showing that she/he has applied for any of the officially valid document, within twelve months of opening the small account.

5. Relaxation regarding officially valid documents (OVDs) for low risk customers

If a person does not have any of the ‘officially valid documents’ mentioned above, but if is categorised as ‘low risk’ by the banks, then she/he can open a bank account by submitting any one of the following documents:

(a) identity card with applicant’s photograph issued by Central/State Government Departments, Statutory/Regulatory Authorities, Public Sector Undertakings, Scheduled Commercial Banks, and Public Financial Institutions;

(b) letter issued by a gazetted officer, with a duly attested photograph of the person.

6. Periodic updation of KYC

Time intervals for periodic updation of KYC for existing low/medium and high risk customers have been increased from 5/2 years to 10/8/2 years, respectively.

7. Other relaxations

a. KYC verification of all the members of Self Help Groups (SHGs) is not required while opening the savings bank account of the SHG and KYC verification of only the officials of the SHGs would suffice. No separate KYC verification is needed at the time of credit linking the SHG.

b. Foreign students have been allowed a time of one month for furnishing the proof of local address.

c. In case a customer categorised as low risk is unable to submit the KYC documents due to genuine reasons, she/he may submit the documents to the bank within a period of six months from the date of opening account.