RBI waives NEFT, RTGS payment charges to promote digital transactions

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Updated: June 7, 2019 2:55:25 AM

The RBI has been levying charges ranging between Rs 2.5 and Rs 25 on banks for transactions routed through the NEFT system, depending on the value of the transaction.

RBI, NEFT, RTGS payment charges, digital transactions,  Nandan Nilekani,  digital paymentsThe RBI has also decided to set up a panel to review ATM charges and fees levied by the banks in response to feedback from stakeholders.

The RBI on Thursday said that it has decided to do away with the charges it levies for transactions processed in the Real Time Gross Settlement (RTGS) and National Electronic Funds Transfer (NEFT) systems in order to promote digital transactions. Banks, in turn, will be required to pass these benefits on to their customers. Instructions to banks in this regard will be issued within a week, the central bank said.

The RBI has been levying charges ranging between Rs 2.5 and Rs 25 on banks for transactions routed through the NEFT system, depending on the value of the transaction. On RTGS, which is meant for instantaneous fund transfers of a minimum value of Rs 2 lakh, the RBI had been charging up to Rs 50, depending on the value of the transaction. Banks typically pass on these charges to their customers.

The RBI has also decided to set up a panel to review ATM charges and fees levied by the banks in response to feedback from stakeholders. “Usage of ATMs by the public has been growing significantly. There have, however, been persistent demands to change the ATM charges and fees,” the central bank observed in a statement. In order to address these demands, RBI has decided to set up a committee involving all stakeholders, under the chairmanship of the CEO of the Indian Banks’ Association, 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, the RBI said.

The interchange on ATM transactions stands at Rs 15 and a large number of firms engaged in deploying ATMs have been asking that it be raised to at least Rs 18. Interchange is the fee the card-issuing bank pays to the bank that has deployed the ATM.

These policies on digital payments seem to be in line with some of the recommendations made by the Nandan Nilekani committee on deepening of digital payments, whose report was released on Monday. Among other things, the report suggested that all retail payment systems be made free of charge for end users and indicated that the ATM business may be turning unviable for banks.

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