New Delhi/ Hyderabad: Intervention from top government officials including the Prime Minister’s Office, saw banks postponing the decision to impose transaction fee at fuel bunks for a few days till the issue is resolved in consultation with the petroleum ministry.
After the announcement by the banks, petrol pump owners deferred their decision late at night said that they would accept card payments till January 13.
Earlier in the day, many state associations of petrol pumps owners threatened that they would not accept any card payment from Monday. This resulted in long queues of motorists forming at fuel bunks.
All India Petroleum Dealers Association, president Ajay Bansal said that HDFC and Axis banks had demanded up to 1 per cent Merchant Discount Rate.
“Our margins are not so much that we can accept this one per cent charge on each transaction. We have specific mechanism to compute the margin and these do not have any scope for MDR charges. This will lead to financial loses for the dealers,” said Mr Bansal.
Mr Rajiv Amaram, joint secretary of the Consortium of Indian Petroleum Dealers, said, “The amount that is being deducted, banks say, will be debited to our account and the net transaction value will be credited to our account. They are quoting RBI circulars to justify this. The circulars have no reference to credit/debit card charges. We feel the banks are using this as an excuse to (make money) from the transactions at fuel stations,”
“Our margins are fixed on a per KL (kilolitre) basis and we do not have any scope to absorb these charges. This will lead to financial losses to the dealers. In view of the debit of merchant discount rate (MDR) of 1 per cent, it has been decided to stop accepting payment through credit/debit cards from January 9,” Mr Amaram stated.
The threat of petrol pump owners to reject card payments would have been an embarrassment for the Modi government which has been tom tomming increase in cashless transactions as a major achievement of demonetisation.
A senior official from HDFC Bank said the imposition of one per cent transaction charge in the form of MDR was an industry decision which had been taken by all the banks.
Cap on number of ATM transactions is back
Banks have started charging customers for card transactions and are also levying service tax. Banks have also reimposed the limit on the number of ATM transactions per month.
Prior to demonetisation, only five transactions per month were allowed free of cost. After that limit, card users were made to pay '20 per transaction. This rule also is back in force now.
Andhra Bank’s Labbipet branch manager M. Vijay Pratap told this newspaper that card transaction fee has been restored from January 1 as no guidelines were forthcoming from the RBI for an extension of the exemption.
However, he said, “This is a charge the merchants should pay and they need not pass on the charge to their customers. This charge is levied for the service a bank is providing to merchants. Unfortu-nately, some merchants are passing the transaction charges onto the customers,” he said.
