Each time a person without adequate balance in his/her account tries to withdraw cash from an ATM or uses debit cards to make a payment, the bank penalises him/her Rs 25 plus GST as ‘transaction decline’ charge. This can be termed as the digital version of a charge for bouncing a cheque.
“Such exorbitant penalty for digitally paying consumers ‘disincentivises’ them, thereby many are moving away from digital payments. This applies more to the marginalised class of depositors who may not always have adequate funds in their accounts,” the association said.
The body said that these charges are not only unjust but also against the principle of ‘transaction decline’ as this is not like issuing a cheque to a third-party but like a depositor walking into a branch and trying to draw cash. Also, there is no cost to the card-issuing bank in such transactions.
The association also urged the RBI governor not to cut interest rates as inflation has been high and oil prices were firming up.