SBI Cards & Payments Services Limited (SBI Card) has said that cheque payments up to Rs 2,000 will be subject to a charge of Rs 100 with retrospective effect from April 1. Payments above the threshold will be exempt from the levy. The move is ostensibly aimed at discouraging such small payments via cheques and nudge people to adopt digital mode of payments.
"A fee of Rs 100 will be charged for payments made by cheque for an amount less than or equal to Rs 2,000 w.e.f April 1, 2017," the credit card company said in a statement.
"We have observed a trend of payment-related disputes arising in small cheque payments, causing inconvenience to customers as well," the PTI quoted Vijay Jasuja, SBI Card CEO, as saying.
The move comes weeks after India's top three banks — SBI, HDFC Bank and ICICI Bank — announced a slew of charges on cash transactions, both at ATMs and branches, besides enhanced minimum balance norms for account holders.
Launched as a joint venture between State Bank of India and GE Capital in 1998, SBI Card has a customer base of about 4 million, according to a profile update.
SBI's stake in the joint venture is 60 percent with the rest being held by GE Capital. The bank intends to raise its stake to 74 percent, SBI chairperson had Arundhati Bhattarcharya had said last month while launching the SBI Card Unnati.
"To encourage adoption of credit cards and facilitate expansion in the reach of digital payments, the SBI Card Unnati will be offered free, at zero annual fee, for four years," the PTI quoted her as saying.
The push towards digital payments picked up momentum after the demonetisation of Rs 500 and Rs 1,000 notes by Prime Minister Narendra Modi last November that also triggered a cash crunch lasting about four months.
An analysis by Kotak Institutional Equities said that currency in circulation as on April 7 stood at Rs 13.6 lakh crore, translating into 9.1 percent of the country's nominal gross domestic product as against 12.4 percent, prior to demonetisation.
An update by the Reserve Bank of India showed that the total number of credit cards stood at 29.1 million as of February 28, 2017. HDFC Bank was the biggest issuer with 8.71 million credit cards, while ICICI Bank's credit cards stood at 4.18 million.
