RBI has removed charges for payments via NEFT and RTGS and questioned banks to pass on the benefits to customers. This means that payments via NEFT and RTGS would become either free or charges would be drastically decreased. This was announced in the Statement on Developmental and Regulatory Policies, which was released today by the central bank as part of its monetary policy review.
The Reserve Bank levies minimum charges on banks for transactions routed through its Real Time Gross Settlement System (RTGS) meant for large-value instantaneous fund transfers and the National Electronic Funds Transfer (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 Reserve Bank for transactions processed in the RTGS and NEFT systems. 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.
Mandar Agashe, Founder and VP, Sarvatra Technologies said that with the waiver of charges on payment modes like RTGS and NEFT, RBI is clearly nudging the banks towards increasing digital payments. This move will especially benefit the small traders who deal in small value transactions and operates on small margins and for whom every penny counts. “So this is actually a great move for the masses and will go a long way in encouraging digitization of payments and enhancing financial inclusion. Moreover, RTGS and NEFT are much cheaper modes than other payment mechanisms like Cheques in terms of the cost involved in managing end to end transactions until settlement,” said Agashe.