The Reserve Bank of India’s latest move to waive off charges on National Electronic Funds Transfer (NEFT) and Real Time Gross Settlement System (RTGS) was expected for some time now. There has been a strong push in favour of digital transactions, and the costs and charges associated with digital payments have witnessed a steady downswing in the last few years.
Several banks had already waived off NEFT charges for internet banking transactions. This waiver by RBI takes away the costs associated with fund transfers via NEFT and RTGS at par with other alternatives such as the Unified Payments Interface (UPI).
It is expected that now even more customers would prefer to transfer funds via NEFT or RTGS as the method is faster compared to offline alternatives such as cheque payments or demand drafts. This is especially significant in case of RTGS transactions as it allows you to instantly transfer large amounts (i.e. greater than Rs.2 lakh), unlike UPI which has a transaction limit of Rs 1 lakh per day. Also, this should be seen in continuity with the central bank’s decision last month to extend RTGS transactions’ cut-off time from 4:30 p.m. to 6 p.m. on working days.
Currently, an RTGS transaction would cost you anything from Rs 5 to Rs 50, depending on whether you are doing it via net banking or at the branch. With the RBI waiving the fees, an RTGS transaction is set to become as convenient and fast as UPI even when you transfer large amounts.
(The writer is CEO, Bankbazaar.com)