In a bid to encourage digital payments across the country, the Reserve Bank of India (RBI) has announced a host of new measures, including elimination of charges for RTGS and NEFT transactions in both public and private sector banks, followed by its monetary policy June 2019 meeting held on Thursday. Addressing a press conference after the Monetary Policy Committee's meeting in Mumbai, RBI Governor Shaktikanta Das said, "RBI levies minimum charges on banks for transactions routed through RTGS and NEFT system for other fund transfers. Banks, in turn, levy charges on their customers".
"In order to provide an impetus to digital funds movement, it has been decided to do away with the charges levied by the RBI for transactions processed in the RTGS and NEFT systems," Das added.
"Banks will be required, in turn, to pass these benefits to their customers. Instructions to banks in this regard will be issued within a week," the Governor of the central bank said.
RBI has decided to do away with charges levied on RTGS and NEFT transactions, banks will be required to pass this benefit to their customers. pic.twitter.com/p9kcR6q6fZ— ANI (@ANI) June 6, 2019
NEFT or National Electronic Funds Transfer works on a deferred net settlement basis, wherein transactions are lined up and settled in batches. Only the amounts below Rs 2 lakh can be transferred using NEFT services. Earlier, customers had to shell out a certain amount to avail the NEFT facility, which used to vary based on the amount of transfer.
RTGS or Real-time gross settlement, on the other hand, typically used for high-value transactions like Rs 2 lakh and above that require an immediate and more secure clearing within the same day of submission. It takes place from one bank to any other bank on a "real time" and on a "gross" basis. The charges levied for RTGS transactions used to vary depending upon the time of request.
As of now, country's largest bank SBI charges between Re 1 and Rs 5 for transactions through NEFT and between Rs 5 and Rs 50 for RTGS route.
Meanwhile, Das has also announced the RBI's decision to set up a Committee involving all stakeholders, under the chairmanship of CEO Indian Banks' Association (IBA), to examine the entire gamut of ATM charges and fees. The committee will submit its recommendations within two months of its first meeting.