The ministry of corporate affairs has not yet issued any guidelines for reporting of corporate social responsibility spending by companies
With moderation in the economy and core inflation, pressure is mounting on the Reserve Bank to reduce interest rates by up to 50 bps and address liquidity concerns to boost growth
Moneylife Impact: The finance ministry’s strange and controversial diktat to public sector banks to emulate HDFC Bank and levy processing charges on payment of credit card dues by cash or cheque was exposed and followed by Moneylife alone. The rest of the media, including the business press is still silent on this issue
In a letter dated 12th March, the finance ministry has quietly withdrawn its ‘fatwa’ to “consider charging a processing fee from customers paying credit card dues either in cash or through cheque”. In fact, this letter too is written by the same DD Maheshwari, Under Secretary at the Department of Financial Services, who sent out a fatwa marked “most immediate” to all chief executives of public sector banks on 25 October 2012. This time he writes that the letter “stands withdrawn with immediate effect. This has the approval of the Secretary (FS)”.(see letter here)
The finance ministry’s decision to withdraw the letter is a very positive development from the customer’s point of view. It not only means that banks will not be charging this absurd processing fee, but also reveals that the finance ministry is sensitive to public opinion. Our report (Read: Now, penalty for paying credit card dues by cheque! ) had created a furore among depositors and has been the most read, most shared and most commented article on www.moneylife.in for the past fortnight. So what was the anger about?
Well, the finance ministry had not only asked for such a processing fee to be levied, but held HDFC Bank as the example to emulate. It specifically mentioned how HDFC Bank had doubled its charges for cash transactions from Rs50 to Rs100 per transaction. It had also asked banks CEOs to report their action taken to the ministry.
What was particularly outrageous about the finance ministry’s micro-management of fees charged by banks was that the Reserve Bank of India (RBI), which is the banking regulator, is in the process of ‘considering’ the comments to a similar report that it had issued on “dis-incentivising cheque transactions” by levying a slew of fees and charges on everybody who issues or deposits a cheque. Please read RBI Must Scrap No Cheque Idea, which is the most commented article in Moneylife since then.
Moneylife Foundation, our sister entity which has over 21,500 members, had sent a strong memorandum to the RBI asking it to scrap the report in toto. (Moneylife Foundation demands scrapping of the move to penalise usage of cheques ). We have since learnt from another activist that the RBI has received at least 300 representations against this plan. In fact, leading NGOs in Mumbai are scheduled to meet on 21st March to discuss a joint plan to oppose such a move. Those who are attending the meeting include the Mumbai Grahak Panchayat, All India Bank Depositors Association, Consumer Guidance Society of India, Moneylife Foundation, Council for Fair Business Practices, Consumer Complaints Cell and Save Our Lands. The All India Bank Employees Association is also participating in the discussion.
Moneylife columnist Gurpur, a senior banker, had also pointed out how a country like the United Kingdom had bowed to public pressure given up the idea of abolishing cheque usage. See UK govt bows to public pressure—rejects abolition of cheque system. Will RBI follow suit? And even superpowers like the US, who are way ahead of India in terms of adoption of information technology, continue to use cheques.