Seeking to discourage usage of cheques, an RBI paper today suggested that banks should charge cash withdrawal and deposit through cheques, while the government agencies should do away with 'convenience charges' for online payment of utility bills.
"In order to avoid increased dependence or slippage to cash-based transactions, high (both in amount and frequency) cash withdrawals and deposits of cash by individuals may also be charged," said a discussion paper floated by RBI on 'Disincentivising Issuance and Usage of Cheques'.
The other major suggestions include restriction on number of free cheque books, high fee on cheque books, mandatory online payment of credit card bills and ban on post-dated cheques (PDCs).
As per the discussion paper, the government should do away with "convenience charges" for online payment of utility bills and discourage cheque collection boxes at public places.
The suggestions, on which the RBI has invited comments from public by February 28, seek to establish a "less-cash" society and encourage greater adoption of electronic mode of payment.
"...the cheque volumes being processed in the country are still very large. It is felt that speed of decline in usage of cheques can be enhanced by building some 'disincentives' for the cheque-users without causing any undue hardship for any particular section of the society," the paper said.
On the practice of issuing free cheque books by banks, it said, they "should be kept to a minimum number on a per annum basis. The charges levied by banks beyond this number may range from moderate to steep (slab rate) depending upon the cheque usage history of the customer".
The RBI paper said fresh loans, PDCs should be completely stopped, with suitable conditions for late payment and non-payments which should be disclosed upfront.
Existing PDCs should be converted into electronic payment mandates within a prescribed timeline.
"For any cheques issued beyond the stipulated limit, charges may be levied at the time of payment/debit to the account by the paying bank when the cheque is presented for payment through clearing. Such charges may be higher than the charges levied on electronic payments of similar value," it said.
It said that additional charge should be imposed on payment of dividend through cheques.
RBI said that corporates and institutional customers are the largest users of cheques across all value bands accounting for 54 per cent - 64 per cent of cheques processed.
"Access to cheque books should be made costlier for such corporate / institutional customers. There should be no free cheque books given," the RBI paper said.
"It is found that even where educational institutions and public utility companies are accepting electronic payments, they are levying certain convenience fees to the payers which need to be stopped," the paper said.
For corporates, it said that steep charges should be levied by all banks on cash deposits/withdrawals by current account holders into/from their accounts. These charges need to be levied by all banks.
As regards payment made by government department, the paper said that for individuals they should quickly adopt electronic payments for which a specific timeline should be set for implementation.
"Government departments and agencies should immediately stop levying convenience fee on customers who prefer to make payments using electronic means such as cards, online banking," it said.