An official of the bank says that it would be unviable for banks to abolish charge as the transaction has a cost component
Banks, mostly nationalised, have not yet abolished the charges for digital transactions, state's apex body for trade and industry has complained to the national banking regulator who had abolished its share of charges recently. An official of the bank said that it would be unviable for banks to abolish charge as the transaction has a cost component.
The Reserve Bank of India, in its notification dated June 11, stated that, in order to provide an impetus to digital funds movement through Real Time Gross Settlement (RTGS) and National Electronic Fund Transfer (NEFT) systems the charges levied by the Reserve Bank on its member banks will be waived from July 1 onwards.
During her maiden budget speech, earlier this month, Finance Minister Nirmala Sitharaman proposed that, 'the business establishments with annual turnover more than Rs 50 crore shall offer such low cost digital modes of payment to their customers and no charges or Merchant Discount Rate (MDR) shall be imposed on customers as well as merchants.
In the letter, Gujarat Chamber of Commerce and Industry (GCCI) said that it has welcomed the announcement by the finance minister and the steps to give a boost to the digital payments, but it has been disappointed both private and nationalised banks, except SBI, are still recovering MDR charges.
"This was proposed in the budget. Still banks are levying charges. Some are saying that they have not received any circular from the head quarters. This cannot be tolerated. Banks should refund all the charges levied on the customers from July 1 onwards," said Shailesh Patwari, former president of GCCI. An agitated Patwari said that since RBI has committed on abolition of charges, banks should also abolish, and not reduce the transaction charges.
A leading jeweller said that, charges are levied if RTGS payments are made through cheque, but not if the payment is done online. He, however, said that, some private banks have stopped levying charges.
However, sources in banks told DNA that they have passed on the benefit caused because of abolition of charges by RBI, but since these transactions are a cost to the the banks. "Every RTGS and NEFT transactions had two components. One that RBI charged to the banks and second one the banks charge to the customers. Since RBI has abolished its component of the charge, banks have passed it on to the customers, but these transactions are a cost to the banks and it is upto the bank to decide whether to abolish or not. But since, it is a cost, banks have continued with this component," said Ragesh Saraiya, chairman of Mahagujarat Bank Employees Association (MGBEA). The charges on a customer include the Basic Service Charge and 18% Goods and Services Tax (GST).
RBI NOTIFICATION
RBI in its notification dated June 11, stated that, in order to provide an impetus to digital funds movement through RTGS and NEFT systems the charges levied by the Reserve Bank on its member banks will be waived from July 1 onwards
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