MUMBAI: There is a considerable variation in service charges imposed by banks on transactions, which are neither ‘reasonable’ nor ‘reflecting the costs’ as prescribed by RBI, according to a study.
The most painful charges for underprivileged customers are the debit card decline charges many banks impose. Customers attempting to withdraw cash or pay using their debit cards, when their balance falls short are subjected to a penalty.This penalty is imposed even though a declined transaction does not result in any transaction cost for the bank.
According to the study, this decline charge is unreasonable because the bank does not pay any fee to either a third-party bank whose ATM is used or the network provider NPCI. This is because unlike cash withdrawal or balance enquiry transactions, neither banks nor NPCI charge fees to the card issuing bank.
The study has been authored by Ashish Das, an IIT Bombay professor, whose earlier studies had resulted in RBI reworking ATM charges and also forced banks to refund fees for withdrawals using UPI.
The most painful charges for underprivileged customers are the debit card decline charges many banks impose. Customers attempting to withdraw cash or pay using their debit cards, when their balance falls short are subjected to a penalty.This penalty is imposed even though a declined transaction does not result in any transaction cost for the bank.
According to the study, this decline charge is unreasonable because the bank does not pay any fee to either a third-party bank whose ATM is used or the network provider NPCI. This is because unlike cash withdrawal or balance enquiry transactions, neither banks nor NPCI charge fees to the card issuing bank.
The study has been authored by Ashish Das, an IIT Bombay professor, whose earlier studies had resulted in RBI reworking ATM charges and also forced banks to refund fees for withdrawals using UPI.
