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Curbs on cash withdrawal: Traders, public protest against transaction fee

On March 1, in a move aimed at discouraging cash transactions, HDFC Bank, ICICI Bank and Axis Bank started charging a transaction fee after a certain number of cash transactions.

By: ENS Economic Bureau | Mumbai |
March 3, 2017 2:26:08 am

A day after some private banks started charging a fee on cash transactions, public and traders on Thursday came out against the move saying that levy of such charges is “a kind of financial terrorism on account holders” and “putting the people at the will and mercy of the banks”. Public displayed their anger on Twitter with some users even asking the Reserve Bank of India to intervene in the matter.

“Soon HDFC and ICICI will debit 2 per cent of monthly balance as privilege charges for banking with them. @RBI please wake up,” said a twitter user. “HDFC, ICICI & Axis to levy Rs 150 per transaction after 4, in a month for depositing or withdrawing …so so sad. Charges to use own money,” said another user.

“#cashtransaction This is not done. I would avoid these banks#axis #HDFC #ICICI,” said another Twitter user.

On March 1, in a move aimed at discouraging cash transactions, HDFC Bank, ICICI Bank and Axis Bank started charging a transaction fee after a certain number of cash transactions. However, public sector banks, including market leader State bank of India, are yet to announce any charges on cash transactions.

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According to HDFC Bank, people who hold saving accounts don’t have to pay any transaction amount up to 4 transactions from the home branch but with every additional transaction, the customer has to pay an amount of Rs 150. ICICI Bank said there will be no charge for first four transactions a month in home branch while Rs 5 per Rs 1000 would be charged thereafter subject to a minimum of Rs150 in the same month. Axis Bank has also started charging similar fees.

A retired banker admitted that traders, small businessmen and hawkers will be the most affected by the new service charges as they deal in cash. “Levy of such charges is a kind of financial terrorism on account holders. It can’t be the way to encourage digital payments and putting the people at the will and mercy of the banks,” said the Confederation of All India Traders (CAIT).

“This move of the banks will greatly harm the general public more since savings and salary accounts are used by common man to discharge various obligations,” said CAIT national president BC Bhartia and secretary general Praveen Khandelwal. “The concept of digital payment is a welcome step and CAIT has been closely working in association with Mastercard in the country for last more than two years for promotion of digital payments. If digital payment is to be leveraged, the government must absorb transaction charges by subsidising the same to banks and effective incentive schemes must be announced to promote more digital payments in India,” they said.

According to educationist KA Vishwanathan, the RBI should come out with proper guidelines and direction for banks for taking such measures. “There’s no transparency and banks are doing whatever they wanted. What’s the criteria for imposing such charges? Banks didn’t even make proper announcements,” he said.

He said banks have started charging even for cheque payments. “I got a message from SBI which says… ‘From April 1, 2017, fee of Rs 100 will be charged for SBI Card bill payments made via cheque of amount up to Rs 2,000. For faster payments use NEFT and get payment credit within one working day’,” Vishwanathan said.

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