MUMBAI: The government, caught between a rock and a hard place as far as fee on the use of plastic money in petrol pumps is concerned, is now relying on banks to pacify customers. It has directed all banks to immediately inform customers that their cash back would be credited to them soon.

Two senior bank officials told ET that the government has directed them to notify customers through SMS that 0.75% cash back would be credited to their accounts soon after they make a payment using digital mode. Further, banks are also asked to credit the amount to the customers’ accounts within three working days. Bankers are worried that poor connectivity in various places may make it difficult for them to send an SMS on cash back immediately.

This direction comes at a time when there is waning interest for the use of cards at petrol pumps even though the petroleum ministry has said that oil marketing companies would bear the cost.

This was decided mid-last week at a close-door meeting chaired by Dharmendra Pradhan, minister for state for petroleum and natural gas and attended by CEOs…