Commercial banks impose service charge on ATM users
View(s):Commercial banks are collecting a massive sum of over Rs. 130 million daily by levying a service charge of Rs. 5 from credit or debit card holders for every financial transaction using Automated Teller Machines (ATMs), an official audit report revealed.
The banks used to levy an additional charge of Rs. 2 for the receipt issued via ATMs for money withdrawals or account balance inquiries.
Although this money is being levied by banks as service charges for the maintenance of ATMs, there was no Central Bank guideline to recover the costs related to electricity, rents, security, machine repairs, costs pertaining to refilling the machine from time to time and so on, official sources said.
Normally the salaries of most workers are credited to their bank accounts and they usually withdraw money from ATMs twice or thrice per week for their day today expenses.
A low wage worker pays a sum of Rs. 60 per month indirectly to banks for the maintenance of ATMs, a senior banker said adding that the banks should be directed to absorb the cost without burdening the customers.
In addition the government has imposed debt recovery levy or Medamulana tax on banking transactions at the rate of 20 cents for every 1000 rupees with effect from October last year in accordance with 2018 budget proposal which is applicable for three years.
The implementation of the levy had been delayed for five months due to lack of clarity in levying the tax as there was a confusion as to whether it should be levied on all financial transactions or only cash transactions of banks, a senior Treasury official said.
The Treasury has received around Rs. 20 billion through this tax during the year 2018/2019 under review, he said adding that “this levy effective for three years will not be passed on to the customers”.
Finance Minister Mangala Samaraweera termed this levy as ‘Medamulana tax’ as it intended to collect additional revenue to repay foreign debt taken during the Rajapaksa era.
The debt repayment levy on banks will have a disruptive effect on the banking sector in country as it will be enforced for three years, a senior banker said.
(BS)