Reserve Bank of India scraps Charges on NEFT, RTGS Transfers - (06 Jun 2019)

Banking

Reserve Bank of India (RBI) has announced waiver of charges that are applied on bank transfers carried out either by National Electronic Funds Transfer (NEFT) or Real Time Gross Settlement System (RTGS). The RBI asked consumer banks to pass on this benefit to customers, essentially asking banks to NEFT and RTGS transfers free of cost. The RBI’s decision is in wake of giving an impetus to digital funds movement.

NEFT is an electronic fund transfer system in which the transactions received up to a particular time are processed in batches. The objective of the NEFT System is to establish an electronic funds transfer system to facilitate an efficient, secure, economical, reliable and expeditious system of funds transfer and clearing in the banking sector throughout India, and to relieve the stress on the existing paper based funds transfer and clearing system. The Reserve Bank levies minimum charges on banks for transactions routed through its Real Time Gross Settlement System (RTGS) meant for large-value instantaneous fund transfers. In RTGS, the transactions are processed continuously on a transaction by transaction basis throughout the RTGS business hours. The minimum amount to be remitted through RTGS is Rs 2 lakh with no upper or maximum ceiling.

Usage of Automated Teller Machines (ATMs) by the public has been growing significantly. There have, however, been persistent demands to change the ATM charges and fees. In order to address these, it has been decided to set up a Committee to examine the entire gamut of ATM charges and fees. The Committee is expected to submit its recommendations within two months of its first meeting. The decision would be cost-effective for small traders and all customers.

Tags : FUND TRANSFER CHARGES REMOVAL