Beware! Using a relative's ATM card can be risky, remedy can be denied

The bank can declare a withdrawal by you as illegal and deny any remedy in case a problem arises

An ATM withdrawal proved costly for a Bengaluru-based couple recently. The wife was pregnant and the husband withdrew money on her behalf. When the card was swiped, the ATM did not dispense money, though the amount got deducted from the account. When they filed a complaint the bank rejected it. The couple took the matter to the consumer forum. After almost four years, the court ruled against the couple stating that only an account holder is authorised to use the ATM card.
 
Experts agree with the consumer forum's stance. Says Sandeep Nerlekar, founder & CEO, Terentia: "The bank, ombudsman and consumer forum are correct to reject the complaint, as the bank’s contractual terms restrict cardholders from disclosing card details and ATM pin number to any third party, including family members." Experts are of the view that it is illegal to hand over your card to somebody else for ATM withdrawal. Hence, the bank is right to reject your claim on the grounds of ‘non-transferable rule'.

 
Experts say you should avoid using a family member's card even in an emergency.
 

"Avoid making cash withdrawals using someone else's card as it can lead to untoward situations. Explore other options to access the money lying in your relative's account," says Rajmohan Krishnan, founder and managing director, Entrust Family Office Investment Advisors. In case you fall severely ill, become housebound, or become totally incapacitated, look at alternative ways by which you can let your family members withdraw money from your account.
 
The simplest option is to issue a bearer's cheque and get the money withdrawn by someone else. But issuing a cheque means visiting a bank branch and standing in a queue to get the money. This conventional method can be time-consuming.
 
Tech-savvy people, who use net banking and mobile banking, can transfer the money to the other person's account through RTGS, NEFT or IMPS. These transactions come with their own set of transaction timings and upper limits. You can also transfer money through UPI up to Rs 100,000 per transaction.
 
If you are bedridden, having a nominee will not be of much help. Though a nominee or a legal heir (in the absence of a nominee) is entitled to receive any money lying in an account, he will get access to the money only after the account holder has passed away. Banks give the nominee charge of the account only after the account holder's death.
 
For such situations having a joint savings bank account serves the purpose well. If you have an 'either or survivor' joint account, both the account holders, say, husband and wife, can operate the account fully in the absence of the other. Even the signature of both the account holders is not required. Experts also suggest giving a power of attorney (PoA). The PoA holder can perform a number of banking functions on behalf of the PoA giver, within the limits set by the latter.