Moneylife Foundation demands scrapping of the move to penalise usage of cheques
Moneylife Digital Team 12 March 2013

Moneylife Foundation, as the voice of 21,500 savers, has sent a memorandum to the RBI, pointing out why this move is premature, ill-conceived, impractical and hugely detrimental to the interests of consumers

The Reserve Bank of India recently issued a discussion paper titled “Disincentivising Usage and Issuance of Cheques”. The paper seeks views of ways to promote the usage of electronic transfer of funds by penalising the usage of cheques. Moneylife Foundation strongly and unequivocally opposes any move to curtail the use of cheques through the levy of punitive charges as proposed in the report. India suffers from low penetration of Internet, erratic power situation and low e-literacy even among otherwise literate persons. In that context, penalizing the usage of cheques would cause hardship to the majority of population including senior citizens. Worse, the charges, meant to act as ‘disincentive’ for consumers would only lead to unjust enrichment of banks.
The entire report, in the Foundation’s opinion is premature, ill-conceived, impractical and hugely detrimental to the interests of consumers. The Foundation demands that the idea must be rejected forthwith in its entirety. 
10 years ago
I in person as also in the capacity of the Chairperson Consumer Complaints Cell, fully endorse the contents of this letter from 'MONEYLife Foundation'.
Sss=global yahoogroups, a social networking group of senior citizen members have already opposed this and if required, their endorsements can be obtained.

Mohan Siroya
10 years ago

Now a days (Recently) Banks are charging for Cash payments for Credit card dues.This is not correct because,all banks are collecting interest for the balance dues of Credit cards.
Hence the banning of Cheque payment system is also hindrance to customers who are having credit cards.
Hence RBI should not accept the such proposals.

10 years ago
how right,
Many people are not computer savvy.
Right now My transaction with Indian railway has failed because of the getway something or the other issue.
V Rajendran
10 years ago
As a practising cyber crime advocate, I have already expressed my views AGAINST this ill-conceived of RBI in the forums available. I had an opportunity to address viewers in a Panel Discussion in the No.1 Tamil News Channel "Puthiya Thalaimurai" last week on ATM frauds and related issues. In that forum too, I expressed this view. Thank you, MoneyLife. We are all fully with you. Please guide if I can do anything more on this? V Rajendran, [email protected]
10 years ago
This move is absolutely ridiculous and anti-consumer.

Where is the internet connectivity in non-metros that will permit easy online payment?

Where are the lean, high-performance and low-bandwidth optimized banking portals that make it fast and easy to use online banking? Take a look at ANY banking portal, and these are heavy, graphic-filled webpages that take ages to load, are poorly designed with horrible navigation, and completely non-intuitive user-interfaces. Even the third party payment websites such as BillDesk eventually link you back to your own bank's website to make the payment.

Where is the complete elimination of NEFT and RTGS charges by banks? RBI permits levying of transaction charges "upto" Rs.5/- per transaction for online transactions, and most banks (including SBI) do levy these charges. In comparison, they charge Rs.3/- per cheque leaf. With this warped incentivisation, why should any individual pay MORE per transaction, especially when the cost to the bank is just a few paise for online transactions?

And last but not least, all banks have recently introduced cheque truncation services to speed up processing of cheques electronically. If they were planning to dis-incentivize cheques, why have they invested hundreds of crores in these systems?

MoneyLife needs to aggressively fight this stupid, draconian and antiquated regulation and scrap it before it becomes a widespread disease of over-regulation and micro-mis-management.
10 years ago
At the end of the day, India has been, since inception, about mulcting the citizen to fund the profligacy and corruption of the State. India has cast all morality and propriety to the winds while having produced more laws than any one individual, whether lawyer judge, babu, neta or other can recollect, comprehend or live with. Particularly as they are, for the most part, based on momentary agendas of social and asset distribution engineering rather than any consistent underlying logic.
Ramesh Iyer
10 years ago
I support RBI's move to discourage customers from using cash / cheques, when Banks have heavily invested in technology-driven facilities like ATMs/NetBanking/Mobile Banking, which are not just far more convenient (reducing dependence on Branches), accessible 24x7, but also help reduce costs for both Banks & customers. Besides, the new-age facilities help reduce circulation of black-money. So, in principle, I agree with RBI, but hope it incentivizes customers who use new-age facilities, rather than penalize those who Bank the old-fashioned way. However, if Banks levy 'admin' charges for Branch-banking for certain customers, they would be justified, as they are forced to maintain infrastructure for such stubborn customers.
arun adalja
Replied to Ramesh Iyer comment 10 years ago
agreed banks spend money on infrastructures but how many percentages of people uses internet?and some corporate bodies are charging 1% commission if you pay by net offices have no work so they collect utility bills by cheque /cash.
Ramesh Iyer
Replied to arun adalja comment 10 years ago
That's precisely why I mentioned in my earlier comment that penalizing customers for using traditional Banking methods is not the right move. Instead, RBI should give incentives to those who embrace new-age facilities, to increase its greater use. Persuasion always works better than coercion.
10 years ago
If at all RBI has to do something it should lower the limit for dealing in cash transactions.
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