Govt urges ICICI, HDFC and other banks to reconsider charges on cash transactions, ATM withdrawals

The decision to levy a minimum of Rs 150 for deposits and withdrawals after 4 transactions in a month was made by HDFC, ICICI and Axis banks

In a fresh move to curb the effects of demonetisation, the Government has asked SBI (State Bank Of India) to reconsider its decision of imposing a penalty on non-maintenance of minimum balance in accounts from April 1. According to the sources, the Government has also urged the private banks to reconsider charges on cash transactions and ATM withdrawals above a certain limit.

In a bid to discourage cash transactions and to boost Prime Minister Narendra Modi’s digital payment drive, several banks had in the last few days announced charges after a prescribed number of cash withdrawals.

Earlier, the decision to levy a minimum of Rs 150 for deposits and withdrawals after four transactions in a month by three major private players—HDFC, ICICI and Axis banks—was made on March 1.

The banks said that the first four transactions in a month will be free, thereafter a minimum amount of Rs 150 per transaction will be levied on cash deposits and withdrawals. These charges are not being levied on ATM transactions.

However, for the basic no-frills accounts (with very low minimum balance), a maximum of four cash withdrawals would continue to remain free. There will be no fees for cash deposits.

Earlier, SBI has advised its customers that it would be obliged to maintain a minimum balance in their accounts from April 1 or pay a penalty. SBI said maintaining Rs 5000 would be mandatory for accounts in metros, Rs 3000 in urban areas and Rs 2000 in semi-urban areas and Rs 1000 in rural areas.

SBI has imposed a charge of up to Rs 20 and Rs 10 for more than five withdrawals from other banks’ ATMs.