Chennai: Tamil Nadu Chief Minister M.K. Stalin has strongly condemned the Reserve Bank of India’s (RBI) recent decision to allow banks to increase charges for ATM withdrawals beyond the monthly free limit — from Rs 21 to Rs 23 per transaction — effective May 1.
Taking to social media on Sunday, CM Stalin criticised the Centre’s digitisation initiatives, calling them an “institutionalised extraction” from the poor.
He said that while the Centre initially encouraged citizens to open bank accounts, it later introduced demonetisation and promoted the Digital India campaign.
“What followed were charges on digital transactions, penalties for low balances, and now this hike in ATM withdrawal charges,” he noted.
CM Stalin warned that such measures would force people to withdraw more money than they need, especially hurting the poor and economically vulnerable groups.
“This move undermines the very goals of financial inclusion,” he said.
The Chief Minister pointed out that the increase in ATM charges would particularly affect beneficiaries of welfare schemes like the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA), which is already facing a funding crunch, and those receiving cash transfers under Tamil Nadu’s Kalaignar Magalir Urimai Thittam.
“This is not digitisation. It is institutionalised extraction. The poor swipe, the rich smile,” CM Stalin remarked.
Until now, banks have been permitted to charge customers Rs 21 per transaction after they exhaust their monthly limit of five free ATM withdrawals from their own bank’s ATMs. Under the revised rules, customers will be charged up to Rs 23 per withdrawal beyond this limit.
According to the RBI circular issued on Friday, customers are allowed five free ATM transactions per month (including both financial and non-financial transactions) from their own bank’s ATMs. Additionally, they are entitled to free ATM transactions at other banks: three in metro cities and five in non-metro areas. The new charges will also apply, with necessary modifications, to cash recycler machines, except for cash deposit transactions, the RBI added.
Critics say the increase in withdrawal fees, though seemingly small, disproportionately impacts lower-income individuals who rely on ATMs for accessing government benefits and daily financial needs.
CM Stalin’s remarks have reignited the debate on whether the digital banking push is inadvertently widening the financial divide rather than bridging it.
(IANS)
