70% want charges imposed by private banks on cash transactions to be removed

7 March, 2017, New Delhi: The recent changes made by private banks around charges being imposed on cash transaction have been met with opposition from consumers. While banks are posing this move as another step towards making India a cashless economy, consumers are calling it a very bad decision.

LocalCircles conducted a survey to understand the consumer view on this move. When asked what they thought about the latest charges imposes by private banks on cash whithdrawals and deposits after the first 4 transactions every month, a large 56% said that they did not support this move and want Reserve Bank of India to make the banks withdraw these charges immediately. 26% said that these charges don’t matter as 4 free transactions were enough for them and 4% said that they were anyways using cashless. 14% said that they will support this move only once the cost of cashless transactions were reduced. So, overall 70% consumers are against the move while the remaining 30% are ok with it. A total of 11,081 citizens voted on this poll.

Many citizens also said that these charges will forrce them to close their accounts with these private banks and migrate to bigger public sector banks. Consumers are of the opinion that instead of reducing the cost of digital transactions, private banks are trying to show the stick to the customer and forcing them to go digital. Consumers are very concerned with the cost of digital transactions and many of them have reported that merchants are still charging 2% additional for debit, credit or wallet transactions. Some users also pointed that private banks are using the government and digital transactions as an excuse to cut their operating costs and make more profits. This move is likely to prompt people to withdraw more than their requirements in one go and may actually result in higher magntitude of withdrawals and increased volume of cash transactions.

In a separate LocalCircles survey, consumers had indicated that debit card charges must be brought to zero while credit card and wallet charges must be capped at 0.5%. A submission has been made by LocalCircles to the Department of Consumer Affairs, requesting them to take the matter with Reserve Bank of India and Ministry of Finance.