SBI Card, an arm of the State Bank of India has reportedly started charging fees, for paying back through cheques.
The Times of India reported that the company sent a mail to its customers, mentioning that payments below Rs 2,000 through the cheque will attract a fee of Rs 100. The company “focuses on the marketing and distribution of credit cards,” according to a Bloomberg profile.
Vijay Jasuja, the CEO of the company, told the newspaper they are discouraging cheque payments following disputes over late cheque clearance.
SBI Card is the only card-issuing authority that is not a bank but is registered as a finance company. The organization incurs a cost when processing cheques and Jasuja told the newspaper that close to 92 percent of their customers were using modes of payment other than cheques.
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“We have done a deep analysis. It is not possible that every month the bank is making a mistake in cheque collection,” he reportedly said.
The report adds that the fees will not be applicable for those holding SBI bank accounts, as the clearance is done as an intra-bank transfer. Cheques which are non-SBI will attract fees if deposited across the counter.
Jasuja told the newspaper that the company was disincentivising cheques and incentivising those paying through online means.
The move would be aimed in keeping with ‘going cashless’, the mantra adopted by the government post-November 8 and demonetisation.
The central government has been urging the public to go digital with their money. Recent reports have said though that after the re-monetisation process, cash transactions are now going up again.
