On the advice of oil companies, banks are going to discontinue the cashback
feature they offered on their credit cards
for fuel purchase. This comes into effect from October 1.
“The 0.75 per cent cashback
on fuel transactions will be discontinued with effect from October 1,” read a message from State Bank of India to its customers.
American Express card holders received similar messages. After the demonetisation exercise of November 2016, the government had asked oil marketing companies such as Indian Oil Corporation, Bharat Petroleum Corporation and Hindustan Petroleum Corporation to give a discount on card payments to promote digital transactions.
Apart from the discounts, the government had also directed oil companies to bear the burden of card payment charges — called merchant discount rate (MDR) — which is usually paid by the retailer.
An industry official confirmed the oil companies have decided to discontinue the discount on all credit card payments from October 1. However, the discount on debit card and other digital modes of payments would continue, he said.