Last week, S.K. Garg from Chandigarh wrote to say that State Bank of India (SBI) had charged him Rs 40 to credit a dividend cheque of Rs 160 from Kirloskar Oil Engines; effectively, 25 per cent of his dividend was gobbled up by the transaction charge. SBI told him that the charge was justified because Vijaya Bank had not honoured the company’s dividend warrant.

Why should the investor be made to pay for someone else’s fault? Garg had received no answer to his query. He has now discovered that banks do not charge for electronic fund transfers (EFT), which is more or less correct. The Reserve Bank of India (RBI) website lists bank charges for electronic transfers, which reveal that most banks indeed do not charge for inward electronic credits barring IndusInd bank which charges of Rs 10 per credit and ICICI Bank which levies a tiny fee on inward credits to its corporate customers only. IDBI Bank is however the only one to impose a charge of Rs 25 per inward remittance under the National Electronic Fund Transfer (NEFT) System.

This finally explained to us the case of Girish Mittal who recently complained that IDBI Bank had charged his father Rs 25 for an electronic credit to his account at Baroda. After this paper reported the case, IDBI Bank told Sebi that it does not charge any fee for electronic credit. At the same time it refused to refund the money charged to Mittal, evidently because the branch had correctly debited the customer account.

... contd.