Government advises banks to forgo charges for digital payments
On Sunday, the Finance Ministry suggested to banks that no transaction or payment should be charged for electronic payment. During the Corona pandemic, people have resorted to electronic payment to avoid infection. With the increase in electronic payment, some banks have also started charging its fee from customers. In view of this, the Finance Ministry has suggested to banks not to do so.
The Finance Ministry has told the banks that if online transaction or payment fee is charged then it should be returned to the customers. According to the Finance Ministry, no transaction should be levied on the transactions made through electronic mode on or after January 1, 2020. The Finance Ministry has cited Section 269 SU of the IT Act for this. The ministry has said that under this section, no charges should be levied on future transactions through electronic mode.
Four years ago in 2016, the government stopped the thousand and five hundred rupee notes to stop black money. After this step, the trend of people doing electronic mode transactions was seen increasing rapidly. The closure of old notes led to a surge in digital payments and people reduced the use of cash.
A similar trend is also seen in the corona pandemic. Since currency notes many pass through the hands, this may increase the risk of infection. So people have considered digital payment more secure. In such a situation, if banks charge a fee, then people can avoid adopting electronic mode. In view of this, this suggestion of the Finance Ministry is very important.
A circular was also issued in this regard on 30 December last year. In the circular, Section 10A of the PSS Act was quoted stating that no electronic transaction will be charged on or after January 1, 2020. It also includes MDR i.e. Merchant Discount Rate. However, such complaints were received that despite the circular some banks are charging fees under the UPI on the transaction. It was said that only a few electronic payments are free and the fee will be collected after a limit. The Finance Ministry has said that action may be taken against the banks which are found doing this.
