Banks still levying card fee on fuel purchases
NEW DELHI: Several banks are still imposing the transaction fee on consumers paying by debit card for fuel despite a clear instruction from the government not to do so.
Several inconvenienced customers have written to the oil ministry in the past few weeks regarding this illegal deduction, an oil ministry official said. The ministry is engaged in persuading banks with the help of the finance ministry to reverse these charges, he said.
In order to boost digital payments after demonetisation, the government had said that no bank can levy fuel surcharge or transaction fee on customers paying by debit cards. An RBI order also bars banks from levying the fee on consumers; it directs them to recover it from merchants. But the petrol pump dealers have argued that their margin was too thin to pay for fuel surcharge, which is about 2.5% plus service tax. Therefore, the government clarified that petrol pumps too would not pay the fuel surcharge and left it to oil companies to sort this out with the banks.
The current arrangement allows for the card issuing banks to submit information on daily fuel purchase transactions to oil retailers such as Indian Oil, Bharat Petroleum and Hindustan Petroleum and get compensated. But according to consumers and oil ministry officials, many banks including those from the public and the private sector are still levying fuel surcharge.
The card-issuing banks usually respond to customers query on this by feigning ignorance about the government order or say they are "just keeping it as a buffer just in case the acquirer bank asks for it", according to some customers. The acquirer refers to those banks which provide the point of sales machines at petrol pumps. The machine providers usually charge for their service.
Customers said it was a mammoth task to get banks to reverse these charges. "How long can you keep calling their customer care, where most people would have no ready explanation for this," said a frustrated customer, adding that not everyone would even have the time or patience to write to government officials for this. Digital transactions have sharply risen at petrol pumps since demonetisation. Consumers paid `14,000 crore digitally to petrol pumps between November 9 and December 31, according to the oil ministry data. By December end, digital transactions made up nearly 30% of total sales from 10% before the demonetisation.
Several inconvenienced customers have written to the oil ministry in the past few weeks regarding this illegal deduction, an oil ministry official said. The ministry is engaged in persuading banks with the help of the finance ministry to reverse these charges, he said.
In order to boost digital payments after demonetisation, the government had said that no bank can levy fuel surcharge or transaction fee on customers paying by debit cards. An RBI order also bars banks from levying the fee on consumers; it directs them to recover it from merchants. But the petrol pump dealers have argued that their margin was too thin to pay for fuel surcharge, which is about 2.5% plus service tax. Therefore, the government clarified that petrol pumps too would not pay the fuel surcharge and left it to oil companies to sort this out with the banks.
The current arrangement allows for the card issuing banks to submit information on daily fuel purchase transactions to oil retailers such as Indian Oil, Bharat Petroleum and Hindustan Petroleum and get compensated. But according to consumers and oil ministry officials, many banks including those from the public and the private sector are still levying fuel surcharge.
The card-issuing banks usually respond to customers query on this by feigning ignorance about the government order or say they are "just keeping it as a buffer just in case the acquirer bank asks for it", according to some customers. The acquirer refers to those banks which provide the point of sales machines at petrol pumps. The machine providers usually charge for their service.
Customers said it was a mammoth task to get banks to reverse these charges. "How long can you keep calling their customer care, where most people would have no ready explanation for this," said a frustrated customer, adding that not everyone would even have the time or patience to write to government officials for this. Digital transactions have sharply risen at petrol pumps since demonetisation. Consumers paid `14,000 crore digitally to petrol pumps between November 9 and December 31, according to the oil ministry data. By December end, digital transactions made up nearly 30% of total sales from 10% before the demonetisation.
