In line with the recommendations of the industry lobby Indian Banks' Association (IBA), a limit has been imposed on the free access to automated teller machines (ATMs) of other banks from Thursday, October 15, onwards.

As a result of the forthcoming measure, customers of one bank will now face a cap not only on the withdrawal amount from ATMs of other banks, but also in terms of the number of transactions per month.

The restriction on third-party ATM usage implies that a maximum of Rs 10,000 can be withdrawn by a customer from an ATM of a bnak in which he does not have an account. Further, a maximum of five ATM transactions would be allowed to third-party customers.

It was in August that the Reserve Bank of India (RBI) had asked the banks to restrict third-party ATM usage from mid-October.

The imposition of the cap was recommended by the IBA last July, when it highlighted the fact that third-party ATM usage resulted in a financial burden on banks, essentially due to the high interchange expenses involved in the transactions.

The IBA guidelines also included the provision of allowing a savings account holder five free third-party transactions per month, with charges being levied sixth month onwards; and doing away with the free third-party usage for current account holders.