Date:12/09/2008 URL: http://www.thehindu.com/2008/09/12/stories/2008091256361700.htm

Business

RBI to cap cheque collection charges

Special Correspondent

Differential slabs confuse customers

Endeavour should be to migrate
to electronic modes of payment
No additional charges such as
courier charges should be levied

MUMBAI: The Reserve Bank of India on Thursday proposed to rationalise and bring in uniformity in the mode and amount of service charges for electronic payment products and outstation cheque collection.

“The endeavour should be to migrate to electronic modes of payment — Real Time Gross Settlement (RTGS), National Electronics Fund Transfer (NEFT) and Electronic Clearing Service (ECS) — more so for large-value and inter-city transactions and the benefit of waiver of charges offered by the RBI should get passed on to customers to the extent possible,” the RBI stated

The RBI is considering mandating maximum charges for these services as: Inward RTGS/NEFT/ECS transactions — free, no charges to be levied. For outward transactions: RTGS — Rs. 1-5 lakh (not exceeding Rs. 25 per transaction); Rs. 5 lakh and above (not exceeding Rs. 50 per transaction). For NEFT — up to Rs. 1 lakh (not exceeding Rs. 5 per transaction); Rs. 1 lakh and above (not exceeding Rs. 25 per transaction). Banks may prescribe charges not higher than cheque return charges for ECS debit returns.

For outstation cheque collection, the RBI prescribed: up to Rs. 10,000 (not exceeding Rs. 25 per instrument); Rs. 10,000 to Rs. 1 lakh (not exceeding Rs. 50 per instrument); and Rs. 1 lakh and above (not exceeding Rs. 100 per instrument).

All these charges will be all inclusive, the RBI stated. “No additional charges such as courier charges, out of pocket expenses and the like should be levied to the customers. No bank should refuse to offer the products to its customers or decline to accept outstation cheques deposited by its customers for collection,” the RBI stated. The revised charges shall be effective from the date of notification.

The RBI stated that “it offers electronic products free of charge to member banks. Multiplicity of slabs levied by banks and lack of transparency in norms adopted by them for various segments of customers has led to confusion in the minds of customers, acting as a hindrance to the overall growth of the electronic payment products.” The RBI felt that given the cost and risks involved in handling paper instruments, banks need to favourably price electronic products and “a situation where electronic products are costlier than paper products is inexplicable.”