‘Institutionalised extraction,’ says Tamil Nadu CM on hike in ATM withdrawal fees

Tamil Nadu Chief Minister MK Stalin on Sunday criticised the Reserve Bank of India’s decision to permit banks to raise fees for automated teller machine cash withdrawals, describing it as “institutionalised extraction”.

The Reserve Bank of India on Friday allowed banks to increase ATM cash withdrawal fees by Rs 2 – to Rs 23 per transaction – for withdrawals made by customers in addition to their first five transactions, which are free. The move will be implemented from May 1.

“This will make people withdraw more than they need and in particular, negate the objectives of financial inclusion of [the] poor,” the Dravida Munnetra Kazhagam chief said. “This is not digitisation. It is institutionalised extraction. The poor swipe, the rich smile.”

Stalin criticised the Centre for promoting Digital India and formal banking, only to impose charges on digital transactions, penalties for low bank balances and increased withdrawal fees.

Digital India is a campaign to make government services available to citizens electronically and to provide rural areas with high-speed internet connectivity.

“Beneficiaries of MNREGA [Mahatma Gandhi National Rural Employment Guarantee Act], which is already starved of funds and the poor who benefit from our KMUT [Kalaignar Magalir Urimai Thogai scheme] cash transfers will be the ones who will be hit the hardest,” the chief minister added.

KMUT is a cash transfer scheme of the Tamil Nadu government that provides women beneficiaries with Rs 1,000 monthly assistance, The New Indian Express reported.

The Mahatma Gandhi National Rural Employment Guarantee Scheme is a social welfare program that aims to guarantee the “right to work” by providing at least 100 days of paid employment for rural households whose adult members are willing to do unskilled manual work.

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