M Veerappa Moily, Chairman of the Standing Committee of Parliament on finance assured a group of activists that the issue of ever rising and unfair bank charges would be discussed in detail by the committee. The meeting, which included Mr Dinesh Trivedi (of the All India Trinamool Congress) and Mr TK Rangarajan (Communists Party of India-Marxist) was told how banks have begun to levy a series of unjustified and unconscionable charges on customers, which actually hurt poorer customers at a time when the government is working at financial inclusion, while rich customers with large deposits are not charged. They drew attention to the furore caused by State Bank of India (SBI) decision to charge Rs25 on every single cash withdrawal from SBI Buddy app through ATM.
The group, including well known NGOs, trade unions, finance editors and experts presented Mr Moily a 1,100 page print out of over 100,000 signatures to an
online petition at Change.org protesting against discriminatory bank charges and demanding action.
The group also submitted a Memorandum with seven points and requested that these be addressed urgently.
The meeting was coordinated by Mr Sanjay Nirupam, President, Mumbai Regional Congress Committee and former Member of Parliament.
The Parliamentary Standing Committee on Finance was in Mumbai for meetings with banks, insurance companies and financial institutions on 12th and 13th May.
The group told the Standing Committee that although the Reserve Bank of India requires bank charges to be reasonable, how it refuses to go into the reasonableness of charges and allows banks to operate as a cartel. Since consumers are a disaggregated lot, they are unable to fight back.
The group asked for the following key issues to be dealt with urgently.
1. Ensure Digital Safety by converting RBI’s draft circular of August 2016 into a formal Master Circular, thereby limiting customer liability and shifting the onus of proving customer fault to banks. This is in line with international best practices.
2. Remove Average Minimum Balance Charges: If a customer’s balance is low, then the bank can downgrade the account to a Zero Balance or No-Frills Account (and reduce services like chequebook facilities etc.). It cannot levy a charge. This is in line with international practices.
3. Remove charge on cash transactions, or low value cheques, which discriminates against economically weaker bank customers and students.
4. End Discrimination against old borrowers vis-à-vis New ones for Loans- where new customers are offered significantly lower interest even on floating rate loans.
5. Banks must be ordered to stop the discriminatory charge levied to reduce interest rate on floating rate loans. (There is no such charge or delay when interest rates increase).
6. Making NEFT (National Electronic Fund Transfer) transactions safe by capturing additional data such as name and branch details and have a robust redress process for inadvertent mistakes.
7. Bank services must have a rational, transparent and non-discriminatory pricing framework for banks based on a detailed costing of all products and services
The group of activists who met the standing committee members: Sucheta Dalal, Trustee, Moneylife Foundation; AV Shenoy from the Rashtriya Matadata Manch; Ms Lalita Joshi and Mr Devidas Tuljapurkar, both Joint Secretaries of the All India Bank Employees Association (AIBEA); Harsh Vardhan Roongta, Financial Expert and Advisor; RN Bhaskar, Senior Editor and columnist; Dolphy D’souza, Convener, Police Reforms Watch; DS Ranga Rao, Public Concern for Governance Trust (PCGT); and Yogesh Sapkale, Director (Projects), Moneylife Foundation. Several leading unions and activists have signed and supported the Memorandum on bank charges.
Mahesh Bhatt