SBI halves ATM cash withdrawal limit; What should you do now?
If you were planning to withdraw more cash from ATMs for festive shopping, then here’s bad news for you, particularly if you are an SBI customer. For, the State Bank of India has just halved the ATM cash withdrawal limit of some of its debit cards to Rs 20,000 from Rs 40,000 earlier. As per the bank, this has been done to give a boost to digital transactions as well as in view of the growing number of consumer complaints regarding the fraudulent transactions at ATMs.
Whatever be the case, the fact remains that at a time when some people may need more cash for shopping or other needs, like gifting cash to relatives etc, the daily cash withdrawal limit has been reduced significantly by the State Bank of India, which may hit such people and also prompt them to withdraw cash again and again to meet their requirements.
What should you do?
Thankfully, there is no need to get disappointed as there is still some way out. Firstly, you should know that the bank has slashed the ATM cash withdrawal limits of only some of its debit cards and not all of them. For instance, only the cash withdrawal limits of SBI debit cards issued on Classic and Maestro platforms have been slashed with effect from 31 October, 2018. This means that if you want to go for a higher daily cash withdrawal limit, then you can still apply for a higher card variant, as informed by the SBI itself.
If you are still not satisfied with this, then you also have the option to open a savings bank account with some other bank and have a debit card with a higher cash withdrawal limit. This will help you meet your requirements.
Alternatively, you can withdraw some cash using your credit card and transfer the fund from your debit card to credit card before the due date. However, in this case you will have to pay cash withdrawal charges on your credit card.
Financial experts say that the SBI step of reducing the ATM cash withdrawal limit to Rs 20,000 for some of its debit cards is nothing but a precautionary step to deal with the shortage of currency notes in the system as had happened in the past. In fact, cash withdrawals and hoarding go up during the festive season.
“But in my opinion why should one carry the risk of carrying more cash when one can very well pay through a debit or credit card? Even small vendors – who do not accept credit and debit cards – accept payments through e-wallets like Paytm. In fact, one can electronically transfer money to Paytm without incurring any cost,” says Balwant Jain, a tax and investment expert.
Jain also does not advise taking more than one credit card just to handle the situation of reduced limits on cash withdrawals. “One has to monitor the due date and ensure timely payment of the credit card dues, failing which one’s credit history may get spoiled, thus blocking credit from the baking system. Ensuring a good credit history has become very important nowadays where the new generation invariably takes home and other loans and uses credit cards extensively,” informs Jain.
Experts say that even if you have credit cards with higher credit limits, then you should preferably set your own limits to avoid its misuse and also reduce the chances of fraud. Thankfully, these days some banks offer credit cards which allow their holders to set their own daily cash withdrawal and transaction limits. Better go for them.
“The existing SBI customers, who are currently holding the Classic and Maestro debit cards and frequently require higher cash withdrawals, can opt for a higher card variant such as SBI Gold international debit card (daily withdrawal limit of Rs 50,000) or SBI Platinum international debit card (daily withdrawal limit of Rs 1 lakh). Alternatively, they can switch to a different lender who would be able to cater to their withdrawal requirements. Some banks even offer customers the facility of either choosing their debit card’s withdrawal limit, or increase their existing card’s withdrawal limit upon submitting a request with the concerned bank,” says Sahil Arora, Head of Payment Products, Paisabazaar.com.