Wednesday, July 16, 2008

Union Bank offers cash withdrawals from ATMs free

Public sector Union Bank of India has become the leading bank in making cash withdrawals by its deposit holders from ATMs of other banks free. The bank has set an example for its private sector peers.

Earlier on March 10 this year, the Reserve Bank of India (RBI) had issued a notification that all scheduled commercial banks should not charge any service fee for withdrawals from other bank ATMs with effect from April 1, 2009.

Before this notification till March this year, banks were charging customers between Rs 10 and Rs 50 per transaction, including balance enquiry, if they used the ATMs of other banks.

From April 2008, the RBI through notification made balance enquiry from other bank ATMs free and the charge for cash withdrawal was capped at Rs 20 per transaction.

M.V. Nair, chairman and managing director of Union Bank of India explained, “Banks charge a fee on cash withdrawal from other bank ATMs because the second bank bears the cost of replenishing the cash withdrawn by the first bank’s account holders. The second bank charges this cost to the first bank, which in turn, passes it on to its ATM cardholders as service charge.”

He added, “But we have decided that the bank will shoulder this cost and our customers won’t have to pay any fee for cash withdrawal from other bank ATMs.”

Nair was addressing a banking seminar organized by the eastern regional council of the Federation of Chambers of Commerce and Industry.

The Union Bank of India, has brought all its 2,513 branches under the core banking solution platform which has made fund transfers through electronic modes such as RTGS (real time gross settlement) and NEFT (national electronic fund transfer network) free of cost.

The public sector bank will soon be launching a home search facility for its home loan borrowers. “We have tied up with more than 100 reputed builders across the country and are preparing a database inventory for their properties in different cities,” Nair said.

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