Rbi scrap these cash transaction charges

Rbi scrap these cash transaction charges

In February, the government said that 20 million new zero-balance bank accounts had been created, ostensibly to get India’s underbanked citizens into the formal financial system.
Less than a month later, three of the country’s largest private sector banks — ICICI, HDFC and Axis — have imposed costs on consumers for transactions in cash at bank branches.
Only four cash withdrawals or deposits would be free per account in a branch. From the fifth transaction, a minimum of Rs 150 would be added on as cost.
ICICI Bank would levy an additional Rs 5 every Rs 1,000 transacted. ATM transactions are exempt, they say: only branch transactions are affected. Oh, really?
A country of 1.33 billion people has less than 2.2 lakh ATM machines, mostly confined to metropolitan sites.
Everybody else in the vast hinterland has to operate through branch banking. Restricting third-party cash transactions to Rs 25,000 per day as HDFC Bank proposes, or Rs 50,000 per day, as ICICI Bank will have it, along with these new cash transaction costs, can destroy small and medium business, the informal and farm economy, and slam the brakes on growth.
Zero-balance and salary accounts have not been spared the four-transactions-per-month rule by private banks. If the government and Reserve Bank of India (RBI) do not step in immediately to stop private banks from imposing these transaction costs, state-owned banks might also follow suit.
If that happens, then the hope of extending formal banking to most of India will be proved a farce. A new banking apartheid, which favours wealthy customers and large transactions and excludes the small person from the banking system, will become the norm. The aim should be to make digital transactions so easy and costless as to make use of cash look foolish.