As an ATM card user, you should be aware that your bank allows a limited number of ATM transactions in a month for free of charge. The limit varies from bank to bank, for example, SBI (State Bank of India) account holders can avail 10 free transactions (5 at an SBI ATM and 5 at others) while HDFC Bank account holders can avail only first 5 free transactions at an HDFC Bank ATM.

What you may not know that your non-cash activity, like checking bank account balance, is also considered as transactions by many major banks and when these exceed limit of "free transactions," these are charged, whether or not cash was dispensed from the machine. A failed cash-withdrawal transaction due to technical errors is also accounted for.

In a circular dated 14 August, the Reserve Bank of India said, "It has come to our notice that transactions that have failed due to technical reasons, non-availability of currency in ATMs, etc., are also included in the number of free ATM transactions."

It provided clarification that transaction that were not made in relation to withdrawal of cash or failure of a transaction due to technical error on part of the software/hardware issues cannot be included among the "free transactions" allowed by a bank.

"It is hereby clarified that transactions which fail on account of technical reasons like hardware, software, communication issues; non-availability of currency notes in the ATM; and other declines ascribable directly / wholly to the bank / service provider; invalid PIN / validations; etc., shall not be counted as valid ATM transactions for the customer. Consequently, no charges therefore shall be levied," the circular said.

"Non-cash withdrawal transactions (such as balance enquiry, cheque book request, payment of taxes, funds transfer, etc.), which constitute 'on-us' transactions (i.e., when a card is used at an ATM of the bank which has issued the card) shall also not be part of the number of free ATM transactions," it further clarified.

"This directive is issued under Section 10(2) read with Section 18 of the Payment and Settlement Systems Act, 2007 (Act 51 of 2007)," it added.