SHANGHAI, April 6 -- Banks in China have agreed to cancel yuan-backed cross-bank ATM inquiry fees by April 20, ending the disputed charges which have led to lawsuits since they came into effect in June last year.

"We asked our member banks to drop cross-bank ATM inquiry fees on yuan-backed bank cards before April 20 after discussion and making agreement with our members," the China Banking Association said today on its Website.

The association's 39 member banks include China's big four state-owned lenders and major commercial banks like China Merchants Bank, Shanghai Pudong Development Bank and others.

The charges on trans-bank automatic teller machine inquiry were not in conflict with China's pricing laws or rules covering commercial bank services, the association said.

However, commercial banks agree to take their social responsibility seriously and to waive the fees because of the market response.

The main reason quoted in he banks' consideration of the issue was that many card holders were in the low and medium income group, the association said.

Since June 2006, the country's big-five lenders, allying with China UnionPay, the country's sole bank card system operator, started to charge 0.3 yuan (4 US cents) on each cross-bank ATM inquiry. The lenders hold a big consumer pool in China.

Some smaller lenders such as Shenzhen Development Bank charged a less expensive 0.2 yuan for each such inquiry to woo more clients from big players.

Banks said last year they charged the fees to cut costs and to avoid the waste of resources. It was noted that each inquiry cost only 1 yuan.

However, the charges annoyed consumers, leading to widespread grumbling that the domestic banks were taking every way to charge fees without improving their services.

Some bankcard holders also said the charges showed lenders' breach of contract with bank card holders because the service were said to be free when the bankcards were issued.

The disputes also went to count last year.

Deng Weijie, a 34-year working in Shanghai, sought to the Xuhui District People's Court to protect her interests as a cardholder. She sued sub-branches of the ICBC, CCB and the Bank of Communications and China UnionPay over a 1.5 yuan fee she incurred on cross-bank inquiries.

The disputed charges pushed the People's Bank of China and the China Banking Regulatory Commission, together with officials from the State Administration of Foreign Exchange and the National Development and Reform Commission, to discuss the issue with China UnionPay and commercial lenders in July 2006.