In a bid to encourage digitisation and discourage cashless transactions, some banks have announced a steep hike in cash transaction fees. True, this move will propel people to move away from cash. But limiting the number of free cash transactions will hit them hard and may also propel them to withdraw more.
Certain charges were already being levied by banks while doing cashless transactions through a credit or debit card. Now banks are also restricting the deposit and withdrawal limit while doing transactions from the home branch or ATM where Rs 5 per Rs 1000 would be charged thereafter subject to a minimum of Rs150 (plus cess) in the same month, adhering to rules and regulations imposed by different banks.
Number of free transactions
Banks have allowed four free transactions per month. Even for the basic no-frills accounts, maximum four cash withdrawals will continue to remain free and there will be no fee applicable for doing cash deposits.
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Minimum charges applicable
Banks like HDFC Bank, ICICI Bank and Axis have begun to charge a minimum of Rs 150 per transaction for deposits and withdrawals after four free transactions per month. Previously, these banks used to charge Rs 20 for deposit and withdrawal after the free transactions made thereon.
Deduction criteria
After doing the first four free transactions from HDFC bank, Rs 5 per Rs 1000 would be charged thereafter subject to a minimum of Rs150 in the same month. On the other hand, ICICI Bank will charge Rs 5 per Rs 1000 where the first ATM withdrawal of the respective month will be free from any charges. Moreover, in the case of ICICI Bank, there will be no charge for doing the first four transactions a month in the respective home branch.
At Axis Bank, the first five transactions or Rs 10 lakh of cash deposits or withdrawals would be free and charged at Rs 5 per thousand rupees or Rs 150, whichever is higher.
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Third party limit
In some case, many banks have imposed the third party transaction limit at Rs 50000 per day, while Axis Bank has capped the third party cash transactions at Rs 25000 per day.
However, it is to be noted that a senior official of a public sector bank has said that there have been no directives from the government to the banks regarding the imposition of such kind of charges on customers.