SBI To Impose Charge On Cheque Payments

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Mumbai: SBI Card, the State Bank Of India arm has decided to impose a fee on payments made by cheques. The card company recently communicated to its customers that henceforth payments of below Rs 2,000 made through the cheque drop box will attract a charge of Rs 100.

Speaking to TOI, SBI Card MD and CEO Vijay Jasuja said, “A large number of cheques were being dropped late into the boxes and subsequently disputes were raised on late payment charges. We have done a deep analysis. It is not possible that every month the bank is making a mistake in cheque collection”.

To avoid such disputes the bank has decided to discourage cheque payments.

SBI Card is the only issuer in the country which is not a bank and is registered as a finance company. As a result, it incurs a cost in collecting and depositing cheques for clearing.

According to Jasuja, 92% of cardholders are settling their bills through non-cheque mode.

The fees do not apply to SBI account holders, who make cheque payments across the counter. In such cases the cheques are not sent for clearing and the payment is made as an intrabank transfer. However, non-SBI cheques would incur fees even if deposited across the counter in branches.

“Of the 8% who are paying by cheque, around 6% have bills of over Rs 2,000 and it is only the remaining 2% who are getting affected,” Jasuja said. He added that while the company was disincentivising cheques, it was providing incentives to those paying online by way of higher reward points.

SBI Cards claims to have 14 modes of bill payments but most of them involve access to internet over mobile or desktop. Without a mobile phone or internet connection the only paperless way of payment is through standing instructions.

“We are only looking at recovering that clearing cost. When we are talking about digitisation and all modes are available, what is the need of paying by cheque?,” said Jasuja.

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