In order to provide an impetus to digital funds movement, Reserve Bank of India (RBI) on Tuesday directed banks to withdraw charges levied on National Electronic Funds Transfer (NEFT) and Real-time gross settlement (RTGS) with effect from July 1.
According to a notification issued by the RBI, it has decided that with effect from July 1, 2019, processing charges and time-varying charges levied on banks by the top bank for outward transactions undertaken using the RTGS system, as also the processing charges levied by RBI for transactions processed in NEFT system will be waived by the Reserve Bank.
"The banks are advised to pass on the benefits to their customers for undertaking transactions using the RTGS and NEFT systems with effect from July 1, 2019, the notification reads.
Reserve Bank of India directs banks to withdraw National Electronic Funds Transfer (NEFT) system and Real-time gross settlement (RTGS) system charges with effect from July 1. pic.twitter.com/t5b74Gy0AQ— ANI (@ANI) June 11, 2019
Earlier on Thursday, the RBI said it has done away with charges on fund transfers through RTGS and NEFT routes to boost digital transactions and asked banks to pass on the benefits to customers.
The NEFT and RTGS System is used for fund transfers up to Rs 2 lakh.
Both are popular financial transaction systems. Currently, banks charge between Rs 30-55 on RTGS and Rs 2-25 on NEFT fund transfer.
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.
"In the area of payment and settlement systems, it has been decided to do away with the charges levied by the Reserve Bank for transactions processed in the RTGS and NEFT systems in order to provide an impetus to digital funds movement," RBI Governor Shaktikanta Das had said announcing the plan on the sidelines of the second monetary policy decision.
Meanwhile, the RBI has decided to set up a committee to review the charges levied on the use to ATMs as the usage by the public has been growing significantly.
With Agency Inputs