Banks are committing massive extortion in the name of hidden charges. Not hundreds, thousands, or lakhs, but thousands of crores of rupees are being diverted without accounting. Bankers are sucking up the earnings of working people in the absence of those who question this.
The number of Indians going abroad for better education for higher education is increasing. Banks are extorting thousands of crores of rupees in the name of processing fees and exchange markup from family members who send money to those abroad. This was revealed by Capital Economics, an independent research firm.
Indians are sending large sums of money abroad for those who are living overseas. For the 2021 financial year, the total was $ 12.7 billion (approximately 95,000 crores). Of this, $ 3.8 billion was spent on higher education, followed by travel ($ 3.2 billion) and family support ($ 2.7 billion).
Banks announced a few years ago that they were reducing charges for sending money abroad. As a result, their income dropped significantly.
In 2016, Rs 15,017 crore was collected under processing fees, which dropped to Rs 12,142 crore in 2019. Banks have sharply increased the hidden charges levied in the name of exchange markup to cover this loss. Exchange markup charges rose to Rs 4,422 crore in 2019 from Rs 2,505 crore in 2016.
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On one hand, banks are carrying out a serving program, saying that processing charges have been reduced. But the cash box of the banks seems to be stocking high. Capital Economics said it had unauthorisedly collected Rs 9,700 crore in the name of exchange markup at the time of cash payments to foreigners for the year 2020. This year, banks have set a processing fee higher and have collected Rs. 26,300. Of this, Rs 9,700, which was collected in the name of hidden charges, accounted for 36 percent.
Banks charge in the name of Exchange Markup when sending money abroad or receiving cash from there. The exchange rate between the dollar and the rupee is not always stable in the forex market. As a result, banks’ exchange markup charges as hidden charges rather than direct charges. There have been allegations that banks are putting waving through customers’ money by raising these exchange markup charges for extra income.
About 90 percent of the Indians working in the Gulf countries are working people. They work hard to support their families in India and send cash to India. But banks are also charging huge processing fees from them.
In 2016, the total processing fee was Rs 10,200 crore and by 2020, it will reach Rs 14,000 crore. The value of the hidden charges collected in the remittance quota for the same period is Rs. 4,200 crores to Rs. 7,900 crore.
With the advent of technology and the availability of the Internet, financial transactions have become easier. Processing fees are also declining. But cash payments abroad, processing fees charged at the time of receipt, and hidden charges are on the rise.
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