Withdrawal tax to encourage more transactions: Purwar

Indore, March 22 | Updated: Mar 23 2005, 05:49am hrs
State Bank of India group chairman, AK Purwar, has said that the transaction tax imposed in the Budget on withdrawal of Rs 10,000 or more will encourage people to conduct more transactions with the banks. The withdrawal tax will encourage people to deposit and withdraw more money from the bank, he told PTI on Monday after the IIM-I convocation ceremony.

He said this will encourage companies withdrawing lakhs of rupees to pay salaries to workers, to issue a salary cheque to be credited into the employees account. In fact, it is one way of monetising everything, he said.On the limit of Rs 10,000, he said it was the finance ministers prerogative.

It is more beneficial to the low cost depositors. People are keeping lot of money in saving and current accounts, so that they can transact at anytime.

On the issue of merger of loss-making banks with State Bank or others, he said consolidation is the need of the hour as number of banks are not able to invest on technology upgradation, business process and new products.