Mumbai: In a bid to boost the digital transactions, The Reserve Bank of India, on Thursday, said that the Central bank has done away with charges on fund transfers through Real Time Gross Settlement System (RTGS) and National Electronic Funds Transfer (NEFT). It also asked the banks to pass on the benefits to their customers.
The RTGS is meant for large-value instantaneous fund transfers with a lower limit of Rs 2 lakhs and no upper limit, while the NEFT System is used for fund transfers up to Rs 2 lakh.
The State Bank of India (SBI), country’s largest bank, charges between Re 1 and Rs 5 for transactions through NEFT and between Rs 5 and Rs 50 for RTGS route.
After the Monetary Policy Committee’s meeting, RBI released its statement on Developmental and Regulatory policies. The RBI said that it levies minimum charges on banks for transactions routed through RTGS and NEFT system for other fund transfers and the 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 RBI for transactions processed in the RTGS and NEFT systems,” read the statement.
“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,” the Central bank said.
The RBI has also decided to set up a committee to review the ATM Interchange Fee Structure, charges levied on the use of ATMs as the usage by the public has been growing significantly.
“Usage of Automated Teller Machines (ATMs) by the public has been growing significantly. There have, however, been persistent demands to change the ATM charges and fees,” noted the RBI.
In order to address these demands, it has been decided to set up a committee involving all stakeholders, under the chairmanship of the Chief Executive Officer, Indian Banks’ Association (IBA), to examine the entire gamut of ATM charges and fees.
The Committee is expected to submit its recommendations within two months of its first meeting. The Composition and Terms of Reference of the Committee will be issued within a week.