A couple of banks may charge you ‘convenience fees’ or ‘cash handling fees’ for deposits in cash recyclers and withdrawals done during non-business hours and on holidays. Although these levied charges aren’t exorbitant, you need to know when to deposit them and how many transactions you must make in order to avoid paying extra.
Following the course of Axis Bank and Bank of Baroda (BoB), ICICI Bank introduced Convenience Fee charges as well, in effect since November 1, 2020. What that means is that you will be charged ₹50 as convenience fee for deposits in cash acceptor machines between 6:00 pm and 8:00 am, as well as on holidays. Axis Bank is charging ₹50 since August for the timing of 5:00 pm to 9:30 am and also on all national and state bank holidays. While BoB levies these charges ranging from ₹50 to ₹20,000 depending upon the amount of cash deposits you make, it has been incremented from the earlier range of ₹10 – ₹10,000. Moreover, you will be charged ₹150 beyond three transactions in a month (earlier that was five transactions per month).
People could have issues with this new norm of banks, especially if you are a business owner and habituated to depositing money at the end of the day. You will have to make a point to deposit and withdraw in business timings of banks to avoid these charges. Banks have introduced these charges as they often employ additional staff in these non-business hours/holidays, and as a commercial entity, they need to check on this. Also, banks see this as floating cash for many traders, who deposit money in the evening for security reasons and withdraw early morning for business purposes.
RBI hasn’t made any such announcement on the matter. However, these charges can’t be at extortionate rates. There is also a breather for certain account holders like Jan Dhan accounts, the differently abled, senior citizens, students, certain incapacitated account holders, and basic Saving Accounts identified by banks, are those who are exempted from such cash handling fees.
These charges are also a way to go ‘less cash and more digital’, a push both the government and RBI are making. Dipika Jaikishan, co-founder & COO, Basis, says that “in the last few weeks, we have seen some private banks announce raising convenience charges for deposits on bank holidays and post bank hours, and on withdrawals as well. Though some of the public sector banks rolled back their charges soon after announcing them, the private banks continue to raise these costs. The spirit of these charges is to move consumers’ bank activities online, and encourage more digital transactions.”
She adds that banks are continuing to invest in digital infrastructure, and are discouraging cash handling + physical visits to bank branches. While cash is still queen, there’s been a spike in UPI transactions over the past several months. Cash withdrawals have risen to around 10% since last November – and in the same period UPI payments have shot up by close to 20% to an average ticket size of Rs 1,850. In July 2020, UPI transactions in India crossed 1.49 billion in volume and US$41 billion in transaction value.
It’ll be interesting to see how customer behaviour with respect to digital transactions evolves in the coming months and years, and how neobanking changes the way we bank”, says Jaiskishan.
As a matter of fact, it’s high time to go for digital payments that are going to be mutually beneficial for commercial institutions like banks and for us, the customers, who want our money to be safe without paying extra charges.
All images: Courtesy Getty