First demonetisation, now Rs 150 fee by HDFC, ICICI, Axis banks - unfair
The push towards digital continues. Even more than two months after the demonetisation drive – a drive that was taken up as an attempt to weed out black money from our economy, but one that quickly shifted its goalposts to that of a digital economy – the quest for digitisation continues. The cause, however, has now been taken up by private banks.
In a surprising move, private banks like HDFC, Axis and ICICI, in a bid to promote digital transactions, have started levying a transaction charge of Rs 150 (plus taxes) and cess after four free transactions in a month from March 1.
The new charges would apply to savings as well as salary accounts effective from March 1, According to a circular issued by HDFC Bank. The circular further informs that customers would be levied Rs 5 per thousand for transactions amounting above Rs two lakh in a month if the withdrawals are from a home branch.
These charges, for the time being, apply only to transactions at branches and not at ATMs. ATM interchange charges, however, have been re-introduced.
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| Photo: Reuters |
The rules of this new transaction tax vary a little from one bank to another. Here’s a gist of what it means for each of the three banks involved.
ICICI Bank
The charges in ICICI bank are the same as they were before the demonetisation drive was announced on November 8.
According to details on their website, there will be no charge for the first four transactions a month in a home branch; while a fee of either Rs 5 per Rs 1,000 or a fee of Rs 150 – whichever is less – would be charged thereafter in the same month. The third party limit would be Rs 50,000 per day.
For non-home branches, ICICI Bank would not charge anything for the first cash withdrawal of a calendar month and Rs 5 per Rs 1,000 thereafter or Rs 150.
For cash deposit anywhere, ICICI Bank would charge Rs 5 per Rs 1,000 (subject to a minimum of 150) at branches, while deposit at Cash Acceptance Machine would be free of charge for the first cash deposit of a calendar month and Rs 5 per thousand thereafter.
HDFC Bank
Customers of HDFC Bank will be charged Rs 150 per transaction, beyond the first four free ones each month. The new charges would apply to savings as well as salary accounts.
For home branch transactions, the bank will allow deposits or withdrawals of up to Rs two lakh free of cost at one go per day. Post that, they will be charged at the rate of Rs 5 per Rs 1,000, or Rs 150, whichever is less.
At non-home branches, transactions beyond Rs 25,000 a day will attract a charge of Rs 5 per Rs 1,000, or Rs 150, whichever is less.
Axis Bank
At Axis Bank, the first five transactions or Rs 10 lakhs (either cash deposits or withdrawals) would be free and charged at Rs 5 per Rs 1,000 rupees or Rs 150, whichever is higher.
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According to a report in The Indian Express, this move looks all-the-more upsetting when you consider that the three banks that have imposed this fee, have been enjoying a huge amount of profit already.
HDFC and ICICI have been highly profitable in the last four quarters. HDFC Bank’s cumulative profit for the year 2016 was Rs 13,933.79 crore. Meanwhile, ICICI made cumulative profits of Rs 8,478.33 crore during 2016.
The question here lies, is when the banks are already that profitable, what was the sudden need to levy transaction fees this high on their customers? Is this a general business decision, or is there a government push for this? According to an reports, a senior official from Axis Bank said there has been no directive from the government to the banks regarding levy of such charges.
“The bank is restoring the practice that existed before November 8 (when demonetisation was announced). This is applicable to bank branches since cash supply is easing,” the Axis spokesperson said.
But even if that is the official stance, what pushed three separate private banks towards a digital agenda, all of a sudden?