New Delhi, November 8: In an attempt to promote digital transactions in India, the Reserve Bank of India (RBI) said that from January 2020 banks could no longer charge for online transactions in the National Electronic Fund Transfer (NEFT) system.
RBI said: “Digital payments constituted a high 96 per cent of total non-cash retail payments during the period October 2018 to September 2019. During the same period, the NEFT and Unified Payments Interface (UPI) systems handled 252 crore and 874 crore transactions with year on year growth of 20 per cent and 263 per cent, respectively. This rapid growth in the payment systems, inter-alia, has been facilitated by a series of measures taken by the Reserve Bank of India.”
The RBI has taken innumerable measures to boost digital payments in India. In monetary policy meeting of July the apex bank decided to remove the charges levied on NEFT and RTGS transactions. However, no fixed date was mentioned during that meeting.
NEFT is a nation-wide payment system facilitating one-to-one funds transfer. Under this scheme, individuals can electronically transfer funds from any bank branch to any individual having an account with any other bank branch in the country participating in the scheme.
Earlier, State Bank of India (SBI) used to charge Rs 2.50 for NEFT transactions up to Rs 10,000, Rs 5 for up to Rs 1 Lakh, Rs 15 for between Rs 1 Lakh and 2 Lakh and Rs 25 for transactions up to Rs 2 Lakh. When it comes to RTGS, the SBI charges Rs 25 for an amount ranging from Rs 2 Lakh to Rs 5 Lakh.
In July RBI issued a statement saying: “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.”