Following up on the announcement made on June 6 after the bi-monthly monetary policy review, the Reserve Bank of India on Tuesday evening announced that it will waive all charges on fund transfer through popular RTGS and NEFT systems from July 1. The RBI has also asked banks to pass on the benefits to customers from the same day. The RBI said it has reviewed the various charges levied by it on the member banks for transactions processed in the RTGS and NEFT systems. The Central Bank added that it has decided that with effect from July 1, 2019, processing charges and time varying charges levied on banks by RBI for both the services will be waived off.
RBI Sets Deadline for Axing of charges
“The Reserve Bank has reviewed the various charges levied by it on the member banks for transactions processed in the RTGS and NEFT systems. In order to provide an impetus to digital funds movement, it has been decided that with effect from July 1, 2019, processing charges and time varying charges levied on banks by Reserve Bank of India (RBI) 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 statement from RBI read.
Funds Limits for RTGS and NEFT
The Real Time Gross Settlement System (RTGS) is meant for large-value instantaneous fund transfers while the National Electronic Funds Transfer (NEFT) System is used for fund transfers of up to Rs 2 lakh. Country’s largest bank State Bank of India (SBI) charges between Rs 1 and Rs 5 for transactions through NEFT and between Rs 5 and Rs 50 for RTGS route.
Banks ”advised” to fall in line
“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 RBI added. The Reserve Bank levies “minimum charges” on banks for transactions routed through its RTGS and NEFT, and banks, in turn, levy charges on their customers.