RBI removes charges on NEFT, RTGS fund transfers, will review ATM charges next
The RBI has also decided to set up a committee to review the charges levied for using ATMs as its usage by the public has been growing significantly
June 06, 2019
In order to boost digital transactions, the Reserve Bank of India (RBI) said on Thursday that it has removed charges on fund transfers via RTGS and NEFT routes. The Central bank also asked lenders to pass the benefits to customers. The Real Time Gross Settlement System (RTGS) is used for large-value instantaneous fund transfers, while the National Electronic Funds Transfer (NEFT) System is meant for fund transfers up to Rs 2 lakh.
India’s largest lender, State Bank of India (SBI), charges between Re 1 and Rs 5 for NEFT transactions and between Rs 5 and Rs 50 for RTGS route.
Impetus to digital transactions
An official statement released by the RBI said that the decision was aimed at providing an impetus to digital funds movement. “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 Central bank said.
The RBI levies a minimum charge on banks for transactions routed through RTGS and NEFT system for other fund transfers. In turn, banks, impose a charge on their customers.
Next up, RBI will look at ATM charges
The RBI has also decided to set up a committee to review the charges levied for using ATMs as its usage by the public has been growing significantly. “There have, however, been persistent demands to change the ATM charges and fees,” the RBI noted.
The committee will comprise of all stakeholders, under the chairmanship of the Chief Executive Officer, Indian Banks’ Association (IBA), to examine the entire gamut of ATM charges and fees.
The group is expected to submit its recommendations within two months of its first meeting, RBI Governor Shaktikanta Das said. The composition and terms of reference of the committee are expected to be out within a week.