On June 6, 2019, the Reserve Bank of India (RBI) made an important announcement regarding the waiver of all service charges associated with the popular NEFT and RTGS transactions. This waiver of charges would come into effect from July 1, 2019, and the RBI has mandated all the other banks to pass on this benefit to the consumers from the same day.
The National Electronics Funds Transfer (NEFT) System is meant for nationwide transfer of funds up to a value of Rs. 2 lakhs, while a customer can make large-value instantaneous money transfer through the Real-Time Gross Settlement System (RTGS). Currently, NEFT timings are 8 am to 7 pm and charges are up to Rs. 25 set by RBI.
It must be noted that India’s largest bank, State Bank of India (SBI) charges a minimum amount of Re. 1 to Rs. 5 for every NEFT transaction and Rs. 5 to Rs. 50 for each RTGS route.
The announcement was made after a bi-monthly monetary policy review, where the RBI reviewed the many charges imposed by it on the member banks for fund transfers through NEFT and RTGS.
The announcement was made after a bi-monthly monetary policy review, where the RBI reviewed the many charges imposed by it on the member banks for fund transfers through NEFT and RTGS.
According to sources, RBI has undertaken this move to stimulate digital funds transfers and would formally implement it from July 1, 2019. At present, the Reserve Bank of India levies a “minimum charges” on other banks for the online transaction services like NEFT and RTGS. This in-turn makes the banks pass on the charges to their customers. However, with the waiver of such charges, the end consumers can find a direct relief in processing charges across all the banks of India.
“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,” it said.
I’m Shiv Kumar, a graduate with a passion for finance, marketing, and technology. My journey into finance started with a desire to understand money management and investing.
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