Skip to main content

RBI "appeases" tech savvy upper class, refuses to remove big penalties affecting poor

Counterview Desk
Even as welcoming Reserve Bank of India's decision to remove RGTS and NEFT transactions the Financial Accountability Network India (FAN India) – a group of civil societies, unions, NGOs and peoples movements – has said that it merely seeks to boost digitalisation and is yet another indicator that the RBI is interested in promoting banking among only a particular class (tech-savvy, urban, middle and upper-middle class).
In a statement, FAN India has said, RBI has ignored the interests of the weaker sections of society, which are affected most due to higher charges on basic services, pointing out that a pilot study conducted by RBI in Mumbai has revealed that over than 25% of the customers are "unhappy with the charges such as penalty on non-maintenance of minimum balance, cash deposit charges at home and non-home branches, cheque return charges (deposited by the customers) and for signature verification."

Text of the statement:

The Financial Accountability Network India (FAN India) welcomes the Reserve Bank of India’s (RBI's) decision to remove charges for the Real Time Gross Settlement (RTGS) and National Electronic Fund Transfer (NEFT) transactions and to form a committee under the chairmanship of Chief Executive Officer, Indian Banks’ Association, to ‘examine the entire gamut of ATM charges and fees.’
As a group of civil societies, unions, NGOs and peoples movements, it has been our longstanding demand from the RBI and the government that it look into the matter of bank charges and take immediate actions to remove all the charges.
While the RBI’s decision on removal of the charges on NEFT and RTGS and setting up a Committee is appreciated, it is important to note here that the RBI has so far stated that all charges levied by the banks are at the discretion of respective banks and that the RBI will not step in. It is a welcome step that the central bank has now recognised the problem of charges levied by banks for providing various services.
We demand that the Committee, that is being set up under the chairmanship of Chief Executive Officer, Indian Banks’ Association, will engage with all the stakeholders, including the affected public, and remove the cap on free transactions from ATMs. We also demand that the RBI does not deal with the charges in piecemeal but scraps all bank charges.
The current decision to ‘boost digitalisation’ is yet another indicator that the RBI is interested in promoting banking among only a particular class (tech-savvy, urban, middle and upper-middle class) while ignoring the interests of the weaker sections of society, which are affected most due to higher charges on basic services.
For instance, the charges for NEFT and RTGS varies from Rs 1 to Rs 5 and Rs 5 to Rs 50 (GST excluded) respectively. These are negligible if one compares them with other charges like a penalty for not the maintaining minimum balance, which varies from Rs 10 to Rs 600, and charges on cash transactions, ranging from Rs 10 to Rs 160, done at bank branches.
Recently, a pilot study conducted by RBI in Mumbai revealed that over than 25 per cent of the customers are unhappy with the charges such as penalty on non-maintenance of minimum balance, cash deposit charges at home and non-home branches, cheque return charges (deposited by the customers) and for signature verification.
These charges have also become an impediment in implementing various welfare schemes being run by the government. Just last week, the Maharashtra government has blamed banks for applying various charges on beneficiaries’ accounts, which is making it difficult for beneficiaries to access the money.
On the one hand, banks are increasing charges levied for providing for banking services for common people to compensate for their losses created by massive non-performing assets, thus hurting mostly the weaker sections of society. And on the other, they are allowing free transactions for online users, again neglecting people still dependent on brick and mortar bank branches for their banking activities.
Moreover, this development has to be seen in the broader context of banking reforms that the current government is planning. The push for digitalisation and putting charges on transactions done at banks will push the people away from brick and mortar banks and will make way for reducing the bank branches, the merger of banks, and consequently reducing the number of bank employees.
Our campaign "No Bank Charges” has witnessed hundreds of people sending postcards and emails to the RBI governor, the Finance Minister, and the Prime Minister demanding to scrap all the bank charges.
Our demands:
  • The committee on ATM charges should be open for consultations and remove the cap on transactions as well as the charges. 
  • RBI does not deal with the charges in piecemeal but scraps all bank charges.
The Financial Accountability Network India (FAN India) – a group of civil societies, unions, NGOs and peoples movements – demands from the RBI and the government that it looks into the matter of bank charges on banking services and take immediate actions to remove all the charges which act against the interest of the people.

Comments

TRENDING

HSBC shareholders seek exit from funding Adani's 'contentious' Australian coalmine

By Our Representative  In a move that may embarrass India's top business house known to be close to Prime Minister Narendra Modi, shareholders of HSBC, a British multinational investment bank, the largest in Europe with total assets of US$2.715 trillion, are likely to decide at its AGM on May 28, 2021 a plan to exit coal financing related to the Adani Group, as it begins digging the Carmichael mega coal mine in Australia, reports Melbourne-based South Asia Times.

Gross 'injustice' to children: Rs 5000 cr cut in education budget; 15 lakh schools shut down

Counterview Desk  More than 100 dignitaries, including educationists, academia, social activists, teachers’ union, civil society organisations (CSOs), various networks and people working on child rights, in a letter to Union Finance Minister Nirmala Sitharaman have sought reversal of reduction in allocation for education in the Union Budget 2021-22, even as demanding substantial increase in it.

Communal rhetoric? Hindutva preached by RSS-BJP is 'monolithic', not Hinduism

By Prem Verma*  I am a devout Hindu but not a believer of RSS Hindutva form of Hinduism which brings about hatred of other religions. My Hindu religion has not taught me to look down on other religions and neither has it instilled in me to go about converting others to my religion because my religion is superior.

Buddhist shrines massively destroyed by Brahmanical rulers in "pre-Islamic" era: Historian DN Jha's survey

Nalanda mahavihara By Our Representative Prominent historian DN Jha, an expert in India's ancient and medieval past, in his new book , "Against the Grain: Notes on Identity, Intolerance and History", in a sharp critique of "Hindutva ideologues", who look at the ancient period of Indian history as "a golden age marked by social harmony, devoid of any religious violence", has said, "Demolition and desecration of rival religious establishments, and the appropriation of their idols, was not uncommon in India before the advent of Islam".

Ciminalising 'tool' created, name: Gujarat Land Grabbing Prohibition Act 2020

By Varsha Bhagat-Ganguly, Rejitha Nair* The year 2021 in Gujarat opened its account with 647 alleged land grabbing cases under investigation, 16 FIRs filed against 34 land grabbers within 35 days of Gujarat Land Grabbing Prohibition Act 2020 (GLGPA), as informed by the Additional Chief Secretary (Home), Gujarat State, in a press conference on January 22, 2021. He further informed that of 647 alleged cases, 605 applications of land grabbing were received by different collectors who have initiated suo moto proceedings in 42 cases. The total land in these cases is estimated to be around 1.35 lakh square metre, worth Rs 220 crore as per jantri rates (ready reckoner of land prices in different parts of the state). By March 15, 2021, at least six even cases are before the Gujarat High Court. Of about 11 cases reported in the daily newspapers, in three cases, grabbing of government land is charged, and the rest are land disputes between two individuals. The promptness of the district collect

Swami Vivekananda's views on caste and sexuality were 'painfully' regressive

By Bhaskar Sur* Swami Vivekananda now belongs more to the modern Hindu mythology than reality. It makes a daunting job to discover the real human being who knew unemployment, humiliation of losing a teaching job for 'incompetence', longed in vain for the bliss of a happy conjugal life only to suffer the consequent frustration.

RSS love for 'killer' Myanmar junta behind Indian military presence at Tatmadaw Day?

By Shamsul Islam*  If a shameful act means an action which is criminal and nauseating, it would be an understatement to describe the attitude of the present RSS-BJP rulers of India towards the demolition of democracy and large-scale killing of the people of Myanmar by the military ( tatmadaw ) junta which took power through a coup on February 1, 2021 after renegading the election results in which the party of Aung San Suu Kyi, National League for Democracy, was a clear winner.

Chhattisgarh’s Apra riverfront imitates Sabarmati: 'Devaluing' water, environment

Sabarmati riverfront By Mansee Bal Bhargava*  This year’s #WorldWaterDay (March 22) focus was on ‘Valuing Water’. My school friend, Pragati Tiwari from Bilaspur, Chhattisgarh, called that day knowing my interest in water matters. We were remembering our childhood days as how we used to play on the banks and the bed of the Arpa Nadi (River) during the summer holidays and as how the river would swell like Anaconda to flow happily during the monsoon.

Bihar massacre on Holi day: Brahminical, casteist mindset behind 'uneasy' silence

Bihar chief minister Nitish Kumar By Vidya Bhushan Rawat*  Several people were killed in Bihar amidst Holi festivities, but not much response has come in from the media. The silence of the government and the society as a whole is also appalling. We seek to romanticise these festivals, yet we forget that every year they take so many lives. This despite the fact that Holi appears to be the best time for 'avenging things'.

India's draft migrants policy: Whither concern on job restrictions imposed by states?

By Anil Kumar*  India’s Niti Aayog has prepared a Draft Migration Policy. The draft policy acknowledges migration as an integral part of development, and it calls for positive government interventions that facilitate internal migration. With a rights-based solution to migration, the draft states that the policy should “enhance the agency and capability of the community and thereby remove aspects that come in the way of an individual’s own natural ability to thrive”.