This charge is charged as penalty. This happens when a person tries to withdraw cash from an ATM or a debit card payment if there is not enough balance in the account.
Mumbai: The All India Bank Depositors Association of India has demanded the Reserve Bank of India (RBI) to abolish the ‘Transaction Decline Fee’ on debit cards. The Monetary Policy Committee (MPC) of RBI is scheduled to meet on February 3-5. Prior to the policy meeting, the organization has demanded this from RBI Governor Shaktikanta Das. The association has termed this charge unfair.
As a ‘Transaction Decline Charge’ on a debit card, banks charge GST from people with Rs 25. This charge is charged as penalty. This happens when a person tries to withdraw cash from an ATM or a debit card payment if there is not enough balance in the account. You can call it the digital version of the check bounced charge.
The association said that such a hefty penalty on consumers paying in a digital manner is utterly unwarranted. It sours the digital payment experience. People distance themselves from digital payments because of this. This is more applicable in the case of people who come from weaker sections. There is not always enough balance in their accounts.
The association said that these charges are not only unfair but also against the principles of ‘Transaction Decline’. The reason is that it is not like issuing checks to third parties. Instead it is like going to a depositor’s branch and trying to withdraw cash. Apart from this, there is no cost associated with the card issuing bank in such transactions.
The organization has also appealed to the RBI to cut interest rates. He cited rising inflation and rising crude oil prices.