Centre tells states to ensure smooth movement of bank, ATM staff

Banks told to keep adequate cash at ATMs as FM announces free cash withdrawals at ATMs

The Central government has asked the state governments to ensure that the cash logistic companies and bank staff do not face disruption while travelling for work as most of the country is in a state of lockdown to prevent the spread of the coronavirus.

To ensure that customers do not face difficulties in withdrawing cash from their nearby ATMs, Finance Minister Nirmala Sitharaman on Tuesday announced public sector banks (PSBs) will not charge additional fee for withdrawing money from the ATMs through debit cards for next three months. The government has separately told the banks to ensure availability of adequate cash in ATMs.

Banks offer five free ATM transactions for withdrawal of cash and beyond that, they charge up to Rs 20 per transaction (the fee varies from bank to bank). While the FM’s announcement was made for PSBs, the Indian Banks’ Association will issue a similar advisory to private banks soon, a finance ministry official said.

Customers won’t be penalised for not maintaining a minimum balance in their bank accounts for 3 months, Sitharaman further said. Banks expect customers to maintain a minimum balance in their savings account and it varies in the range of Rs 500-Rs 10,000, depending upon whether it’s a PSB or a private bank.

In a letter dated March 24 to the chief secretaries of all the states, the department of financial services in the finance ministry has asked them to ensure that bank and the Reserve Bank of India staff, cash logistics firm workers (along with ATM maintenance personnel) and the National Payments Corporation of India personnel are able to travel without any disruption.

“Consequent to the government’s strong measure on social distancing and lock down to check further spread of the virus in India, it is expected that people’s need for and reliance on electronic or digital modes of payment, and ATMs for cash withdrawals, will be greater in the days to come,” the ministry said in its communique.

The ministry had also written to the RBI, the NPCI and the IBA on March 23 to take all necessary steps “to ensure that all electronic or digital payment modes and channels function in an uninterrupted and seamless manner.”

Since March 23, banks are operating with a reduced staff at its branches and some banks have limited their working hours, too. Banks have been undertaking only essential services at its branches such as cash deposits and withdrawals, clearing of cheques, remittances and government transactions. All other banking activity such as issuing of fresh loans is not taking place at the bank branches for now.

Some banks such as Axis Bank have already announced a waiver of fee on digital and ATM transactions to help its customers during the pandemic.