Pound foolish?

I have a salary account with "India's largest private sector bank by market capitalization". However I do not use that account for my day-to-day banking transactions. Instead, I prefer to transfer money from the salary  account to another bank which is more convenient in terms of ATM locations and other features.

Until recently, all was well and I would use netbanking to transfer money from my salary account to my regular bank account. Then suddenly, a few months ago, there appeared a "charge" of Rs 5 for transferring money using netbanking. I tried a smaller amount,thinking that maybe there was a charge because I was transferring a large amount. No matter how small the amount, there was still a charge of Rs 5 in order for me to move MY money from account of MINE to another account of MINE.

I decided NOT to pay the "transaction fee". Instead, I went ahead and ordered a cheque book, and now, each month, I write a paper cheque and drop it off into the conveniently located ATM of my regular bank. I happened to talk about this with a colleague of mine, who was even MORE incensed than I was at the "transaction fee" and was doing exactly what I was doing. So I wasn't the only one.

Now, guess what? Paper cheques are absolutely FREE. This makes me wonder: isn't it cheaper for a bank to process a funds transfer using netbanking rather than a paper instrument that necessarily requires human intervention?

Isn't "India's largest private sector bank by market capitalization" being penny-wise?

Update: Guess what the bank that charges for netbanking money transfers just sent me? Along with other random stuff, a personalized PAY-IN-SLIP book! I am now totally lost for words at the pound-foolishness. Unless -- they are actively TRYING to encourage brick-n-mortar banking? Duh!