On Friday, reacting to news reports and allegations that a tiff between banks and Indian Railways online ticketing subsidiary Indian Railway Catering and Tourism Corporation (IRCTC) over fees has resulted in the latter disallowing a number of lenders from using its payment gateway for debit cards.

The Indian Railways said IRCTC has offered seven payment gateways for accepting domestic debit/credit cards and had not forced any restrictions. IRCTC website presently allows card payments banks such as Indian Overseas Bank, Canara Bank, United Bank of India, Indian Bank, Central Bank of India, HDFC Bank and Axis Bank.

IRCTC has blocked these banks from using its payment gateway for debit card payments, according to the reports. IRCTC had stopped such banks from operating on the website as they were unwilling to share a half of the convenience fees earned on customer transactions, the reports said.

“No Debit/Credit Card of any bank has been restricted by IRCTC 4 acceptance on any of Gateways as has been misrepresented by some of the news,” the Ministry of Railways tweeted.

No Debit/Credit Card of any bank has been restricted by IRCTC 4 acceptance on any of Gateways as has been misrepresented by some of the news pic.twitter.com/Wjm51sWKvD

— Ministry of Railways (@RailMinIndia) September 22, 2017

The clarification has come as a relief for thousands of passengers who have accounts or use the cards of banks which were reportedly blocked according to some reports. After demonetization, Finance Minister Arun Jaitley had announced the withdrawal of service tax on railway tickets booked through IRCTC website. The announcement was made during the Budget 2017 presentation in the Parliament.

Debit Cards of all the banks are accepted through 7 Payment Gateways at IRCTC for booking of tickets. 2/3

— IRCTC (@IRCTC_Ltd) September 22, 2017

Since May, IRCTC and the banks have been trying to come to an arrangement over the distribution of fees on online booking of rail tickets. After the demonetization drive in November 2016, IRCTC, a subsidiary of the Indian Railways had waived the Rs 20 convenience fee it charged customers who buy tickets online. However, it expected banks to share a part of the convenience fee that they charge customers.

Earlier, a tax of Rs 20 is levied on sleeper class tickets and Rs 40 on AC class tickets while transacting via IRCTC website. “Every day we are losing 50,000 transactions. Normally, the merchant pays 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,” the report quoted an SBI official as saying.

Matter has been taken up with the concerned editor for issuing rejoinder/clarification abt d misleading news. 3/3 pic.twitter.com/15uF1gdeuT

— IRCTC (@IRCTC_Ltd) September 22, 2017

RBI had earlier lowered MDR charges on payments made through debit cards to 0.25% for payment up to Rs 1,000. The MDR for debit card payments, including payments made to government, will be capped at 0.25% for transactions up to Rs 1,000 and 0.5% between Rs 1,000 and Rs 2,000, RBI had said.

Banks, however, have claimed that government orders after demonetization mandate public sector units, including IRCTC, to bear the cost of providing online payments to customers, called a Merchant Discount Rate. The Indian Banks Association is in talks with IRCTC and Indian Railways to resolve the situation.

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