Misuse prompted cap on ATM use: RBI

MANGALORE: The recent restrictions imposed by Reserve Bank of India on the amount and the number of cash withdrawals at ATMs of other banks, without any service charge, is based on initial feedback on free usage of ATM services across banks, G Padmanabhan, chief general manager, RBI said here on Saturday. It announced these restrictions only to avoid misuse of the facility and such steps will not hamper normal usage, he said.
Delivering a talk on payment and settlement systems at Corporation Bank head office, Padmanabhan while stressing on the need for technological improvements in India's financial system, said, "The success of initiatives should be seen at the counters rather than merely at data centres of the Banks," There is a greater need to strengthen the payment systems in order to safeguard the customer's interest, he noted.
Banks should encourage RBI's initiatives in implementation of secure and sound payment systems. RBI has decided that banks shall continue to be intermediaries for transfer of funds irrespective of technology service provider for enabling such facilities, he said. RBI is also contemplating higher penalty for undue retention of customer's funds, remitted through electronic payment mechanism, Padmanabhan added.
Padmanabhan also informed that after successful introduction of cheque truncation system, physical movement of cheque has been totally eliminated at Delhi and now the RBI is contemplating introduction of the same in Chennai.
J M Garg, chairman and managing director of Corporation Bank, informed that the payment and settlement system has witnessed dramatic change over a period of time. He emphasized on improving efficiency of settlement system to migrate from physical clearing to electronic settlement based clearing. B R Bhat, general manager welcomed the gathering. M R Nayak, general manager proposed the vote of thanks.