Cheers – Finance Ministry withdraws circular on levy of Service Charges


Finance Ministry, Department of Financial Services vide its Cir No 7/72011-BO-II dtg 12/03/2013, has withdrawn the earlier office letter dt. 25/10/2012, wherein Public Sector Banks were advised to charge service fees on payment of credit card dues through cheques or cash.

Well, I am not sure what prompted the Department of Financial Services, to withdraw its circular. But, this is the correct step. Credit card departments have to move to advanced billing solutions, invest in customer service lines, than only force customers to pay the credit card dues through eMode.

Yes, it is very much true that private sector banks levy a service fee if the credit card dues are remitted through cash/cheque. However, this point is made clear at the time of credit card application itself.

Over a period of time, bank customers will start complaining about exorbitant service charges, which will lead to customer migration to alternate modes of payment. In fact, banks should encourage customers via Reward Points, to pay their credit card dues through the eMode.

Reward points are a very effective motivator tool, for credit card customers to try out something new.



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