Reserve Banks new rules to take effect in March

Reserve Banks new rules to take effect in March

10 February 2009

Reserve Bank of Australia will implement new rules on banks and credit unions as of March 3rd that will see banks not charging each other for customers use of different ATMs.

However, the new guidelines have not ruled out banks still charging customers for using different institutions ATMs, resulting in fears that customers, especially rural customers, will have to pay even higher ATM fees with no caps in place.

Presently, banks are charging a $1 fee to other banks when their customers use ATMs belonging to different banks or credit unions. That fee is then passed onto the customer at a higher rate. The latest Reserve Bank rules state that banks and credit unions won't be charging each other, but there is no mention of customer fees.

In fact under the proposed rules, owners of ATMs will be able to charge cardholders direct fees for use of their ATMs on the condition that the charge is displayed before the withdrawal is made. Already, National Australia Bank customers have been informed that they will be charged an additional 50 cents for any transactions made on non-National Australia Bank ATMs.

There are fears that rural customers will be especially effected by ATM fees under the new regime will ATM owners in rural areas having far less competition, leaving banks with greater freedom to charge more.

The Consumer Action Law Centre has submitted a report to the Reserve Bank of Australia asking for a cap to be place on rural ATM owner to eliminate direct charges being placed higher than in metropolitan areas. The submission also states that banks and credit unions shouldn't be able to charge customers for using another institution's machine.

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