Mumbai, Aug 14 (IANS): You may have to pay up to Rs.20 for every ATM withdrawal if the number of such transactions from your own bank exceeds five a month, the Reserve Bank of India (RBI) said Thursday.

For transactions from the ATMs of other banks, the allowance of free withdrawal is three times, as opposed to five times now, after which one may have to pay a fee.

"Taking into account the scope for cross-subsidisation and with a view to ensuring more transparency in pricing of such transactions, banks have been advised to provide their savings bank account holders with at least five free transactions per month at their own ATM," the apex bank said.

This will apply for transactions done at ATMs located in the six metro centres, namely, Mumbai, New Delhi, Chennai, Kolkata, Bangalore and Hyderabad which are well-served in terms of payment infrastructure.

This reduction will not apply to customers with no-frills, small or basic savings accounts, as also for transactions at ATMs outside the six metro centres.

Banks can also offer free transactions above the mandated limit.

"The number of mandated free transactions for savings bank account holders at other bank ATMs has been reduced from five to three per month."

The central bank said the step was taken since access to ATMs had vastly improved in the six metro cities, even as there were costs associated with providing such facilities.

Another objective was to move away from micro-management of business decision taken by banks while protecting the interests of the weaker sections of the society.

As per data provided by the central bank, the number of ATMs had increased from 27,000 as at end-March 2007 to over 160,000 across the country by end-March 2014.

The point-of-sale infrastructure, or loosely a bank office serving customers and equipped with a computer, increased from 320,000 to nearly 1.1 million during this perios.

"It is, however, observed that the development of other payment mechanisms and related infrastructure is more visible in metro areas in the country."

According to a banking official, it was already costing banks Rs.15 per ATM transaction. A burden of another Rs.5 was added after they were asked to post a security guards outside ATM booths after a spate of daring robberies.

The Reserve Bank said banks were free to adopt pro-customer policy on ATM usage. But to minimise hardship, banks had to make customers aware of the location-status of the ATM and the charges.

"Banks have also been asked to put in place mechanisms to advise, alert customers regarding the number of free transactions availed during the month by him/her."