Banks will discontinue the cashbacks credit card users get on purchasing fuel at petrol pumps from 1 Oct after an advisory by OMCs
However, cashback and discount for users of other digital payment methods will continue
New Delhi: From October 1, banks will discontinue the cashback credit card users get at petrol pumps after an advisory by public sector fuel retail companies.
“…as advised by public sector oil marketing companies (OMCs), the 0.75% cashback on fuel transactions will be discontinued w.e.f. (with effect from) Oct (20)19," a message sent by SBI Cards to users said.
All the oil marketing companies have told banks to discontinue the cashback for only credit card users from October, an official with one of the fuel retailers said. However, cashback and discount for users of other digital payment methods will continue, the official said.
The three state-run oil marketing companies (OMCs) --Indian Oil Corp. Ltd, Bharat Petroleum Corp. Ltd and Hindustan Petroleum Corp. Ltd -- give a cashback equivalent to 0.75% of the value of fuel purchased using credit and debit cards and e-wallets. The discount is credited to the buyer’s account within three days of the transaction.
Cashback on fuel purchases was introduced by the government to promote digital payments due to a widespread cash crunch after demonetisation in late 2016.
Despite the cash crunch abating and proportion of digital transactions increasing nearly three years on, the three OMCs continued to bear the cost of the discount.