State Bank of India (SBI) has started making online transactions more expensive. The bank will now be charging customers for IMPS transactions through mobile banking, net banking, UPI and USSD. The latest charges will be applicable from June 1, 2017, according to SBI’s circular.
For transactions below Rs 1 lakh, SBI is charging Rs 5 plus service tax. Transfers above 1 lakh and up to 2 lakh will be charged Rs 15 plus service tax. For transactions above Rs 2 lakh and up to Rs 5 lakh, the bank is charging Rs 25 plus service tax.
The bank also has started limiting the number of ATM withdrawals from basic savings bank deposit (BSBD) accounts. These are the no-frills bank accounts which were opened under the Jan Dhan Yojana. BSBD accounts will have four free ATM transactions following which, they will not be allowed any more withdrawals.
Note that regular saving bank accounts will be allowed 5 free transactions at SBI ATMs and 3 free transactions at non-SBI ATMs in metro cities. In non-metro cities, regular savings accounts are allowed 5 free transactions at SBI ATMs and 5 free transactions at non-SBI ATMs.
Meanwhile, the bank also said SBI Buddy wallet customers will be charging Rs 25 for an ATM withdrawal. Cash withdrawals through business correspondents will be charged 2.5% of the transaction plus service tax (SBI should not be allowed to do this at all, we’ll get to that in a bit). Cash deposits in the wallet through business correspondents will be charged 0.25% of the transaction value plus service tax.
Clarifications the media needs to do
1. On UPI transactions being charged: Note multiple media reports give the impression that UPI transactions will be charged. This is not true.
— suprokash das (@suprokashdas) June 1, 2017
— Rahul Shandilya (@darksecu) June 1, 2017
@narendramodi sir kindly think once again on sbi charges i.e 5 rupees per transaction via UPI effective from 1 june how we become cashless
— jitendra ojha (@Jitendraojha58) May 31, 2017
On the UPI, customers are allowed to send money through the IMPS as well by entering bank account numbers or a unique MMID number. SBI considers them as IMPS transactions even though they originate from a UPI app. Note other banks charge customers for IMPS transactions as well. Here is ICICI Bank, HDFC Bank, and Axis Bank‘s charges for comparison.
Note if a customer sends money on the UPI through a virtual payment address (VPA) they will not be charged. However, banks are allowed to charge merchants an interchange fee similar to the MDR on debit cards.
However, this differentiation between IMPS and UPI transaction does not make sense as the UPI is built on top on the IMPS
2. On cash withdrawals from Buddy wallet: As we said, SBI Buddy should not allow cash withdrawals. SBI Buddy is a semi-closed prepaid wallet – which it also clearly mentions in its FAQs – and the Reserve Bank of India (RBI) guidelines for semi-closed wallets do not allow cash withdrawals from semi-closed prepaid wallets. MediaNama has sent an email to SBI seeking comment about the same and will update once we hear from them.