IRCTC Blocks SBI, ICICI Bank Debit Cards; Greed? Or Business As Usual? (Updated)

It is a move which defies logic!



IRCTC Bans ICICI and SBI Cards

Update (September 23rd, 2017): It appears that this story was misrepresented by some news outlets! Ministry of Railways, in a tweet, has denied ‘restricting’ any of the payment gateways for booking tickets. The tweet said:

We will keep you updated with any further developments regarding this news.


Can we call it greed and insensitivity on the part of Indian Rail and Banks or is it pure business? Whatever it is, the common man, the rail passenger is the victim here.

In a sheer violation of consumer rights and all logic, IRCTC, the subsidiary of the Indian Railways which handles online booking of tickets, has banned debit cards of ICICI, SBI and other banks from booking railway tickets.

On the contrary, e-Wallets are allowed, and in an indirect way, even promoted to be used.

When you are booking tickets, and choose to pay by debit card, here are the banks which are ‘allowed’ by IRCTC:

These are: Indian Overseas Bank, Canara Bank, United Bank of India, Indian Bank, Central Bank of India, HDFC Bank and Axis Bank.

On the other hand, when you choose net banking, then here are the options:

These are 28 banks. Hence, 21 banks’ debit cards have been blocked by IRCTC from booking tickets. These include some of the biggest banks such as ICICI as well as India’s largest public bank: SBI.

Why IRCTC Has Blocked SBI, ICICI Banks?

The reason is convenience fee and MDR, which is charged from the customer. IRCTC wants a portion of that, and banks are refusing to give that.

As per existing RBI rules, when merchants use a bank’s online payment services, then it is supposed to pay a MDR or Merchant Discount Rate to the bank. This MDR is collected from the customer by the merchant, and paid to the bank.

However, the twist in the story came when IRCTC decided to waive off Rs 20 convenience fee they charged from the customer, as Govt. waived off this charge after demonetization.

For this reason, IRCTC started forcing banks to pay a portion of convenience fee they charged from the customer. And banks are refusing to pay it.

A senior SBI official said,  “Every day, we are losing 50,000 transactions. Normally, the merchant pays (convenience fee to) the acquiring bank. But, since IRCTC does not pay us, we were recovering our costs from customers and that is how it had been all these years.”

As per a report, SBI accounted for 35% of all online bookings made on IRCTC.

Indian Banks’ Association (IBA) is right now in talks with IRCTC to resolve this issue. Until then, it is an excellent time for mobile wallets, as there are no convenience fee for e-Wallet transactions.

We will keep you updated as we receive more updates.

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