Gov­ern­ment asks banks to re­jig fees e-chan­nels to boost

The DQWeek (Kolkata) - - REGIONAL NEWS - DQW NEWS BUREAU Kolkata

The gov­ern­ment has writ­ten to the In­dian Banks’ As­so­ci­a­tion (IBA), ask­ing lenders to re­work their charges for cus­tomers in a man­ner that in­cen­tivises dig­i­tal trans­ac­tions over cash trans­ac­tions.

In a re­cent com­mu­ni­ca­tion to the IBA, the finance min­istry’s depart­ment of fi­nan­cial ser­vices has said that banks should con­sider cross-sub­sidi­s­a­tion of low­value dig­i­tal trans­ac­tions by high-value dig­i­tal trans­ac­tions or cash trans­ac­tions. “Banks should proac­tively pro­mote dig­i­tal trans­ac­tions and take all nec­es­sary steps to make them cheaper for cus­tomers than cash trans­ac­tions,” the com­mu­ni­ca­tion said.

Some bankers see the finance min­istry’s state­ment on cross-sub­si­dis­ing low-value dig­i­tal pay­ments with cash trans­ac­tions to mean that banks should start im­pos­ing charges on some cash deals. “Banks may re-ex­am­ine the cur­rent pol­icy of al­low­ing cer­tain num­ber of free cash trans­ac­tions, while charg­ing for ev­ery dig­i­tal trans­ac­tion,” the cir­cu­lar said.

Through its depart­ment of fi­nan­cial ser­vices, the finance min­istry has been push­ing pub­lic sec­tor banks to go dig­i­tal. The di­rec­tions to the IBA are seen as a move to get pri­vate banks on board. Al­though the gov­ern­ment has the power to is­sue di­rec­tions to the Re­serve Bank of In­dia to come out with guide­lines, it has never in its his­tory ex­er­cised this op­tion.

Last year be­fore de­mon­eti­sa­tion, a re­port on dig­i­tal pay­ments by Ashish Das, pro­fes­sor of sta­tis­tics at IIT-Mum­bai, had sug­gested that banks dis­in­cen­tivise cash to pro­mote elec­tronic pay­ments.

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