SBI Card To Levy Rs118 as Fee on All Cheque Payments from January 2020
The giant State Bank of India (SBI), a public sector undertaking, is fast earning the distinction of coming up with a myriad ways of extracting penal charges from customers. 
 
After experimenting with levying charges for cheque payments on credit card dues below Rs2,000, SBI Card, a unit of SBI, has decided to impose a charge of Rs100 plus taxes (about Rs118) for all cheque payments. 
 
Although, SBI Card has said that it will start charging Rs118 from 1 January 2019, some customers have already been charged for making payments through cheques. Few days ago, Amita Mittal, wife of Right to Information (RTI) activist Girish Mittal was charged Rs118 each time when she paid her credit card bill using cheques. Amount on both the cheques was more than Rs2,000, for which SBI Card says there would be no charges. Yet Ms Mittal was charged Rs100 plus taxes.
 


"Cheque is a legal instrument. So why SBI Card is penalising customers for using cheque," Mr Mittal asks.
 
Given SBI’s customer base of over nine million and footprint of over 130 cities in India, this decision is going to affect a lot of customers. 
 
Several banking customers, especially senior citizens and those who are not comfortable with using internet banking or mobile banking, prefer to use cheques for making a payment. They say, a 'crossed' cheque payment ensures that it is paid only to the account mentioned on the cheque, thus eliminating chances of frauds. Some also use post-dated cheques to schedule payment on a future date. 
 
Almost every credit card issuer accepts payments through local as well outstation cheques. The turn-around time (TAT) for clearing local cheques is over three days; outstation cheques may take few more days for clearing. Some may levy a fee for cheque clearance, depending on the amount, from the customer.  
 
However, SBI Card is the only one that has decided to impose a charge of Rs100 for paying your outstanding credit card dues through cheque. Will other card issuers follow its example? What is the motivation behind such moves, which harass consumers, at a time when the bank makes news everyday for its pathetic lending practices leading to massive loan write-offs in every bankruptcy proceeding? 
 
It is important to remember that SBI Card was the first card issuer in April 2017 to start imposing a charge on payments made by cheques. This was despite an aborted attempt by the finance ministry’s department of financial services to issue a similar directive to banks in 2012. 
 
In a communication to customers, SBI Card, the second largest credit card issuer in India, says, "With effect from 1 January 2020, a fee of Rs100 + taxes will be charged for payment towards your outstanding made by cheque. Visit www.sbicard.com or use the SBI Card App to make payments digitally."
 
 
We sent an email to SBI Card seeking more details which remained unanswered till writing this story. We will update this article as and when we receive any reply from SBI Card.
 
On 25 October 2012, DD Maheshwari, undersecretary in the department of financial services sent out a fatwa marked 'most immediate' to all chief executives of public sector banks (PSBs). The burden of this two-paragraph diktat was that "to discourage the use of physical/cash mode of transactions, all public sector banks are requested to consider charging a processing fee from the customer paying credit card dues either in cash or through cheque". HDFC Bank has recently increased such charges from Rs50 to Rs100 per transaction and has sent a communication to its customers in compliance with the regulatory requirement of giving a month's notice. 
 
The finance ministry's 2012 directive has an interesting background which was exposed by Moneylife. Making a mockery of the Reserve Bank of India's (RBI’s) role as banking regulator, the finance ministry, probably acting in the capacity of ‘owner’ of nationalised banks had issued the directive, without even a reference to the central bank. (Read: Now, penalty for paying credit card dues by cheque!
 
Ironically, the order was withdrawn in toto, almost immediately after Moneylife reported the directive. That fatwa withdrawal order was also issued by DD Maheshwari, who had issued the previous one. In the new order, he wrote that the letter “stands withdrawn with immediate effect. This has the approval of the Secretary (FS).”
 
In 2017, when SBI Card started imposing charges on cheque payments for below Rs2,000, its then managing director and chief executive Vijay Jasuja had said, over 90% of its customers make payments through modes other than cheques. "We have observed a trend of payment-related disputes arising in small cheque payments, causing inconvenience to customers as well. We offer several seamless digital modes of payment which we are seeking to encourage, in line with the government's focus towards digital payments and this step will facilitate the same," Mr Jasuja was quoted as saying in a report from Business Standard.
 
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    COMMENTS

    Krishnaswamy Gopalan

    2 weeks ago

    SBI has been notorious for squeezing money from their customers on one pretext or other. This is the fallacy of the whole which affects middle, poor and senior citizens. SBI doles out money in thousands of crores to rich people as loans and creates NPA's . Some of these are non recoverable, since the big fish manage to escape.

    Praveen Sakhuja

    2 weeks ago

    aggeee aggeeee dekho hota hai kaya. Time wil come when chargs will be imposd on every living citize3n to pay for every breath he exales or inhales. this is part of acheye din . Bolo Mera Bharat Mahan

    suneel kumar gupta

    2 weeks ago

    I would share one instance. I had account i 2banks but due to inconvenience, one was being operated. Keeping other was imp. because of locker. So one bank used to charge every 3 months for not operating . So I started tranferring 50/100 rs every month to my other account. Bank people have got work and I saved charges.
    Moral Put load on the donkey to keep it walking stright.

    Ramaswami Sampath

    2 weeks ago

    white caller thieves .The money lost in NPA are recovered from account holders .When you open a SBa/c they never say that you should have a PC to do net banking. When there is a net banking fraud,banks raise their hand. They will say that our bank computers are 32 bit secured.Hackers have more advanced system to hack bank data.

    MT

    2 weeks ago

    Most of you have misunderstood the article... its SBI Card (credit card division ) who will charge customers paying their credit card bills by cheque

    Mahesh S Bhatt

    2 weeks ago

    Digital Mafia without checks & balances & responsibilties & Cybersecurties systems in place Mahesh Bhatt Kirticorp

    Dr Ashok Bhatkhande

    2 weeks ago

    SBI must withdraw these charges.
    Please note that SBI does not give ATM / debit cards for pensioners accounts in Maharashtra.
    State Government must allow pensioners to open their pension accounts at any private bank of their choice.

    BR

    2 weeks ago

    None is born with Electronic devices or services. We all must pay heavily for them repairs, replacing, etc., & HIGH GST. So many avoid buying or using them. I am not old but do not like or trust electronic devices or systems despite claims to Safety
    So I use cheques. I do not use credit or debit card. I walk 45 minutes to pay Bills of Electricity & Cellph & Landline in 3 different directions. GST is levied on electronic buying. I bought 1 Moneylife magazine paying Rs100 for Minimum of 2. GST was taken. Later I saw the printed book got @Rs45 in a friend's office. DIGITALINDIA is killing us & Thrilling to Govt & Digital Electronics companies. It is a sign of one upmanship over others esp., THE last Govt & Executive in the Dept. To pay Dividends on shares by Int Warr, cos took Rs 6,etc., some yrs ago. To pay by electronic ways they charge highly to system givers. What cost is borne by SBI to issue & pass a cheque compared to electronic transfer by its user members ?

    Mukund Puranik

    2 weeks ago

    It is a trend to make maximum money through such charges. Even for flights they have reduced the weight limit just bare minimum so that they can charge several hundred for per extra kg. Same is the case for seat selection. Only middle seats are free. Similarly banks too started the same. I was told in one big private bank that Government wants to eliminate cheque transactions in near future and banks may not issue cheque books so that people will have only option of online banking. However banks never guarantee the security of such transactions since I myself have lost over Rs. 1,00,000/- as my bank account was hacked through debit card making balance almost less than 50. I had to run from pillar to post and various police stations for number of times. I got all odd replies. One manager told me that if account is hacked within India something can be done but if it is hacked out of India RBI has no control so nothing can be done. I told the respective manager that there are much more AAdhaar cards in India than any bank cards. When Aadhar card can have lock/unlock facility why banks can not provide the same? This will help customer to unlock only during transaction and immediately lock the same to prevent any one hacking the card even if hacker is able to track the debit card no. I was told that in order to do this banks will have to change the software. I told manager this is what you have to convey your feedback to your top bosses. Online transaction is fine but will bank guarantee customer's money in case of such hacking takes place? After this bitter experience even I started using cheques in most of my transactions. Cheques are any day safe and if you write the cheque putting carbon paper on reverse side of cheque no one can tamper with your cheque as all your writings will appear in mirror image on reverse side of cheque and carbon ink can not be erased without leaving marks. When banks bring one rule they should also give relief for its side effects.

    REPLY

    ROHIT SAXENA

    In Reply to Mukund Puranik 2 weeks ago

    FYI Goair is charging for all seats in online check in. Others will follow suit shortly.

    Ramesh Bajaj

    2 weeks ago

    They are all the time thinking of ingenious ways to extract more money legimately. Does anyone consider how senior citizens , 70 and above , (retired..not voluntarily) face life with falling interest rates and inflation.

    Subhash Chand Garg

    2 weeks ago

    Earn from ordinary customers and pay to thugs for laundering

    MT

    2 weeks ago

    Intelligent move to increase their valuation for IPO

    SuchindranathAiyerS

    2 weeks ago

    State Bank of India is the Indian State. And since 1947, the Indian State is the Quota (Reservations / License) and Corruption (Extortion / Percentage) Raj. Apart from filling the void created by seventy years of disgusting misrule, there is the gargantuan appetite of the present regime.

    Nakul Kumar Reddy

    2 weeks ago

    There is no chance,if there is a chance they will collect money from God also.
    That is the character of that board members.

    MCA Orders SFIO Investigation of DHFL, 5 Other Companies
    The ministry of corporate affairs (MCA) has ordered an investigation by serious fraud investigation office (SFIO) into affairs of Dewan Housing Finance Corp Ltd (DHFL) and five other companies, says Anurag Singh Thakur, minister of state for finance and corporate affairs.
     
    In his written reply in the Lok Sabha, the minister says, "The Ministry has ordered investigation of DHFL and five other companies, Immediate Real Estate Pvt Ltd, Tenancity Real Estate Pvt Ltd, RKW Developers Pvt Ltd, Darshan Developers Pvt Ltd and Rajen Skycrapers Pvt Ltd to be conducted by SFIO vide order dated 6 November 2019...the time for completion cannot be indicated as of now."
     
    Members of Parliament (MPs) Asaduddin Owaisi and Imtiaz Jaleel Syed had asked the question about DHFL, borrowings of the company and involvement of bank officials. 
     
    Quoting from a report submitted by the regional director (western region) under the  registrar of companies (RoC), the minister, stated as on 31 March 2019, DFHL had taken loans worth Rs95,615 crore. 
     
     
    However, the inspection report submitted by the regional director of RoC has not gone into the involvement of banks and officials, Mr Thakur clarified.
     
    Last month, the RoC regional office in Mumbai has recommended action by the SFIO against DHFL in its report submitted to the MCA. There is enough concrete evidence of financial irregularities by DHFL, while the report points to fund diversion and siphoning. 
     
    As of 6 July 2019, DHFL had a total debt of about Rs1 lakh crore in which banks have an exposure of Rs38,342 crore.
     
    In August, the DHFL board approved a proposal to convert its debt into equity, which will give banks control of the mortgage lender that has been struggling to meet its payment obligations.
     
    Last week on Wednesday, the Reserve Bank of India (RBI) superseded the board and there were reports that they want to refer DHFL to National Company Law Tribunal (NCLT) under the Insolvency and Bankruptcy Code (IBC). An administrator has been appointed to take stock of assets and liabilities. A resolution plan will be accepted only if 66% of the CoC (Committee of Creditors) approve it. There has been a freeze on payment to creditors already.
     
    Last Friday, the central bank appointed a three-member advisory committee to assist the administrator of DHFL. The members on the advisory panel are Dr Rajiv Lall, non-executive chairman of IDFC First Bank Ltd, NS Kannan, managing director and chief executive (CEO) of ICICI Prudential Life Insurance Co Ltd and NS Venkatesh, CEO of Association of Mutual Funds in India (AMFI).
     
    DHFL has been facing a liquidity crisis since September 2018 and has so far paid Rs 41,000 crore of its financial obligations through a securitisation of assets and repayment collections.
     
    DHFL had stopped paying all creditors after the Bombay High Court order on 10th October put a stay on payments. The company had earlier stopped accepting public deposits and renewals of existing deposits and pre-mature withdrawals of existing deposits on 21st May.
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    COMMENTS

    Badal Kumar De

    2 weeks ago

    Someone please suggest me how and when can I liquidate my FD from DHFL.

    Asokkumar Rathnam

    2 weeks ago

    I am surprised that the Digital Team which has authored this Article is confused between the loan portfolio of DHFL i.e. the loans extended by the Company and the borrowings of the Company to fund their assets in its write-up.

    REPLY

    MDT

    In Reply to Asokkumar Rathnam 2 weeks ago

    Thanks for your comment. This report is based on a reply given by the minister in the Lok Sabha. Before the table, the minister had stated, " As per inspection report, the company has taken the following loans as on 31.03.2019."
    You can check it for yourself. Here is the link to the LSQ http://164.100.24.220/loksabhaquestions/annex/172/AU1375.pdf

    Prachi Mishra

    In Reply to Asokkumar Rathnam 2 weeks ago

    Am not sure what needs to be done to get my FD liquidate. Could someone please help me with the same.

    IL&FS Case: NCLT Seeks Presence of Axis Bank, StanChart CEOs
    The Mumbai bench of National Company Law Tribunal (NCLT) has directed the chief executive officers (CEOs) of Axis Bank and Standard Chartered Bank to be present at the next hearing of the IL&FS matter on 16th December.
     
    Hearing a contempt petition against Amitabh Chaudhry and Zarin Daruwala, the CEOs of Axis Bank and Standard Chartered Bank, respectively, the tribunal on Monday observed that both the executives have not presented themselves before the bench.
     
    Axis Bank said that it would take 'appropriate' steps after receiving the order.
     
    "The matter pertains to operations of these accounts in the Bank's branch. The Bank has high respect for all court/tribunal orders. Bank denies the allegations and on receipt of the NCLT Order, Bank will take appropriate steps," an Axis Bank spokesperson said.
     
    A Standard Chartered India spokesperson said: "We are yet to receive the copy of the order. Upon review of the contents of the order, we will decide the way forward."
     
    The case pertains to the two banks allegedly allowing of Ramesh Chandra Bawa, former IL&FS Financial Services (IFIN) head and his family to withdraw money from their accounts in these banks and also to access the lockers even after the accounts were frozen by the NCLT.
     
    Disclaimer: Information, facts or opinions expressed in this news article are presented as sourced from IANS and do not reflect views of Moneylife and hence Moneylife is not responsible or liable for the same. As a source and news provider, IANS is responsible for accuracy, completeness, suitability and validity of any information in this article.
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