Loot of banks in ‘cashless’ times

Although it’s been almost six months since the high denomination currency notes of Rs 500 and Rs 1000 were scraped, several studies show that common man still bears the brunt of the note-ban move.

According to the report of C P Chandrasekhar Committee entrusted by the state government to study the note-ban, things are no different even in Kerala that is deemed to have achieved economic stability. Cooperative sector in the state and other sectors such as employment and tourism as well as government revenues have been hit hard. The committee report concludes with a warning that the present impact was only a beginning and that the decline in the rate of economic growth at the national and state levels would pose huge risks in future. Prime Minister Narendra Modi had defended the demonetisation move saying that it was to check black money and to implement a ‘cashless economy’ by making all citizens part of the banking system, in order to make available the government’s economic benefits directly to the people. He also urged the people to bear the difficulties for 50 days and that the hardships due to the ‘economic transformation’ was temporary. Not only have things been any different it has also paved way for new zones of exploitations. Add to this, the ongoing loot in broad daylight by the banking sector today.

The State Bank of India have become one of the top lenders in Asia with the merger of five associate banks including SBT. Within a short span of time, the move has triggered discussions about consumers being exploited in many ways by the SBI. The latest of the revisions was charging Rs 25 for every cash withdrawal through ATMs starting from June 1. It sparked sharp reactions when the reports appeared in the media. The authorities were compelled to review the decision when calls to boycott SBI spread through the social media. They were also forced to give more concessions. Although this retreat is welcome, previous experiences show that the dark shadows of banking exploitations continue to lurk around. The policy of all the banks so far was to make use of ATM machines for withdrawing cash. The bankers coaxed the people into using ATMS citing the benefits of carrying out monetary transactions with ease and minimizing the rush at the banks. It’s noticeable how the authorities started exploiting in new ways when the people just began using the ATMs widely. Even though the service charge for withdrawing money was revoked, other factors in the previous circular remains ambiguous. One of the moves was to charge a special fee for exchanging soiled and imperfect notes up to a limit. That is around Rs 60 including service tax should now be paid for exchanging 25 soiled pieces of Rs 500. Cheque books will also cost a service charge.

With the merger on April 1, the SBI had directed that the consumers should have a minimum balance in their accounts. The monthly average balance requirement is Rs 5000 in metros, Rs 3000 in urban branches and Rs 1000 in rural branches. A penalty will be charged for the non-maintenance of minimum balance. It has led to a severe crisis for small-time dealers. Even if a person decides to close down his account in order to avoid the complexities created by the bank transactions, the present scenario renders all the attempts futile. It’s because a service fee is charged for that as well. It’s nothing but plain loot. The moves of SBI would severely impact the economic sector that’s staggering after the demonetisation move. The leading lender has a base of 37 lakh crore with more than 50 crore customers. Majority of the customers belong to the working class who suffer the most. The banks have landed them into further crisis. SBI despite being the country’s leading public sector bank is also following the same path of exploitation adopted by some new generation banks earlier. SBI’s policy change has hence encouraged the new –gen banks to look for new ways of loot. The Prime Minister who keeps urging to corporate with the country’s banking sector and calls for cashless dealings should not feign ignorance about this betrayal. Though the banking and digital transactions have their own positive sides, lack of transparency and exploitation would lead to reverse outcomes. If the loot by banks isn’t curbed immediately, the country would continue to be in the quagmire of note-ban.