January 31, 2012

Green Banking

This is with reference to the news report “Bye-bye cheques, hello electronic payments” (Business Line, January 23). It was indeed commendable that banks launched a “green banking” movement and encouraged paperless banking.
This is more efficient, faster and safer. However, the RBI, in its wisdom, permitted the banks to charge Rs 6 per NEFT transaction; which the banks were very prompt to implement. This defeats the whole purpose of the “green banking” campaign. Customers in the high net-worth or wealth management category aren't charged for cheques.
In any case, even those who are charged for additional cheque books would find it more economical to use cheques rather than NEFT services, where they are charged for each transaction.

The only benefit of electronic banking is greater safety, when compared to outstation cheques sent by post and subjected to the vagaries of the postal system.
It would be interesting to see if the imposition of the service charge for NEFT transactions has dampened the initial enthusiasm for electronic banking.
The banks would do well to render this service free, or at a small one-off annual fee, if the spirit of electronic banking is to continue its rise in popularity.
Source : www.thehindubusinessline.com dtd 31/01/2012

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