Banks introduce convenience fee for cash deposits in machines

Banks in private sector have started charging a convenience fee for cash deposits by customers in cash recyclers during non-business hours and bank holidays. While Axis Bank had already started levying the charge earlier this year, ICICI Bank, too, plans to levy it from November.

“Effective November 1, 2020, a convenience fee of Rs. 50 per transaction, will be levied on cash deposited in the cash acceptor or recycler machines on bank holidays and between 6:00 pm and 8:00 am on working days,” ICICI Bank said in a recent communication.

Further, the convenience fee would be applicable if the cash deposit in the cash acceptor/recycler machines exceeds Rs. 10,000 per month either as a single transaction or multiple transactions.

The fee will not be applicable to senior citizens, basic savings bank account, Jan Dhan accounts, accounts held by incapacitated and visually impaired persons, student accounts or any other accounts identified by ICICI Bank.

Axis Bank also charges a similar convenience fee on cash deposit transaction done at the rate of Rs. 50 per transaction after banking hours (or between 5:00 pm to 9:30 am) and on national and State bank holidays. The fee was effective from August 1.

The move is being seen as an inconvenience to small traders and shopkeepers who often go to a cash deposit machine to deposit their day’s earnings after shutting shop late in the evening.

To avoid the convenience fee, the businessmen may either store the money in the shop or carry it home, and deposit it later during business hours.

Bankers said banks often have to deploy additional staff on holidays to collect such cash. Moreover, this fee comes in the backdrop of “less cash and more digital” push by both the government and the central bank.

“Many traders find it easy to deposit cash (in the bank’s cash deposit/ recycler machine) at night before going home and then withdraw it early in the morning before opening their shop or business. It is a way of securing their money for them but for the bank it is like floating cash. Banks have to deploy resources for each such transaction,” said a bank executive.