Banks including HDFC Bank, ICICI Bank and Axis Bank Wednesday onwards will be charging a minimum amount of Rs 150 per transaction for all cash deposits and withdrawals beyond four free transactions in a month. These charges would be applicable to all savings as well as salary accounts effective from Wednesday, HDFC Bank mentioned in a circular. HDFC would also limit the third party cash transaction at Rs 25,000 each day. This will be effective from Thursday.
This move could be assessed as one which is discouraging cash transaction and encouraging digital transaction as the government suggests India to take a step towards digitalization after the note-ban move. For the basic no-frills accounts, maximum four cash withdrawals would continue to remain free and there would be no fees for cash deposits.
Concerning ICICI Bank, the charges remain the same as they were before demonetization. According to details, this bank won’t be charging you for the first four transactions of a month in home branches while Rs 5 will be charged per thousand rupees after that. The third party limit would be Rs 50,000 per day.
For non-home branches, the first transaction of a calendar year will be free though Rs 5 will be charged per thousand rupees. For anywhere cash deposit, ICICI Bank would charge Rs 5 per thousand rupees (subject to a minimum of 150) at branches, while deposit at cash acceptance machine would be free of charge for a first cash deposit of a calendar month and Rs 5 per thousand thereafter.
ATM interchange charges have also been re-introduced:
Axis Bank charges nothing on the first Rs 10 lakhs of cash deposits or withdrawals and then charge at Rs 5 per thousand rupees or Rs 150, whichever is higher. However, it still remains unclear if public sector banks have started to implement this policy.
CAIT Secretary General, Praveen Khandelwal reacting to the situation says, “the Confederation of All India Traders strongly objects levy of abnormal charges by Banks on withdrawal of cash more than 4 times from Saving Bank Accounts. 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 mercy point. The concept of digital payment is a welcome step and CAIT is closely working in association with Mastercard in the Country since last more than two years for promotion of digital payments in the Country. If digital payment is to be leveraged, the Govt must absorb transaction charges by subsidizing the same to Banks and effective incentive schemes must be announced to promote more & more digital payments in India. RWAs, Trade Associations and other such organizations should be taken into confidence for working in tandem with Government to promote digital payments.”