The Delhi High Court on Wednesday questioned Reserve Bank of India's decision to put a cap on withdrawals by banking customers using their ATM cards, saying account holders were being "unneccesarily taxed".

As per RBI's new guidelines, bank customers in six metros -- Delhi, Mumbai, Chennai, Kolkata, Hyderabad and Bangalore -- are allowed to withdraw money free of charge only five times a month and every transaction beyond this limit will be charged Rs 20 per use.

A division bench of Chief Justice G Rohini and Justice P S Teji issued notice to RBI, Indian Banks' Association (IBA) and State Bank of India while fixing the matter for next hearing on February 18.

"Why are you unnecessarily taxing your own account holders. File your response by next date of hearing," the bench said.

The High Court was hearing a PIL filed by advocate Swati Aggarwal, seeking directions to allow banking customers to make unlimited number of transactions free of any charge on own bank ATMs.

According to the plea, the guidelines came into force from November 1 and have already been implemented by several banks, including State Bank of India, the largest bank in India, said the plea.

It claimed that the guidelines were issued at the behest of a few banks and IBA, which had approached RBI seeking changes in the extant instructions regarding free transactions at other banks' ATMs.

The plea contended that levying of charges was highly "arbitrary and unjustified" besides being "discriminatory and against good banking practices and reforms and a backward move".

It also said that the RBI guidelines were against international practices in relation to use of own bank ATMs followed across the world.

"In almost all modern economies of the world, there is no cap on the number of transactions one can make on own bank ATM and unlimited number of transactions remain free of charge on their own bank ATMs," it said.

The petition contended that RBI decision is contradictory to its own earlier circular dated March 10, 2008, whereby it had "justified and given directions allowing the free usage of ATMs for unlimited number of transactions on own bank ATMs". (Zee News)