RBI Removes Charges on NEFT, RTGS Transactions

New Delhi, June 6, 2019:

The Reserve Bank of India (RBI) has decided to remove charges on the RTGS (Real Time Gross Settlement System) and NEFT (National National Electronic Funds Transfer) transactions.

The central bank asked consumer banks to pass on this benefit to customers, essentially asking banks to NEFT and RTGS transfers free of cost.

The Reserve Bank has that "banks will be required, in turn, to pass these benefits to their customers" and "instructions in this regard will be issued within a week."

While announcing the scrapping of charges on RTGS and NEFT transactions, the RBI said it was doing so to boost digital transactions.

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 up to Rs 2 lakh.

The State Bank of India (SBI) currently charges between Re 1 and Rs 5 for NEFT transactions and between Rs 5 and Rs 50 for RTGS.

In its statement on developmental and regulatory policies after the Monetary Policy Committee's meeting, the RBI said it levies minimum charges on banks for transactions routed through RTGS and NEFT system for other fund transfers. Banks, in turn, levy charges on their customers.

Now, it has been decided to do away with the charges levied by the RBI for transactions processed in the RTGS and NEFT systems, it said.

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