Starting July 1 (Monday), fund transfer through RTGS and NEFT systems will not attract any charges from Reserve Bank of India. This announcement was made by RBI on June 6 and will come into effect from Monday, thus making RTGS and NEFT transactions cheaper.
This is a decision that has come at a time when the government has been pushing for going digital and avoiding the conventional methods of issuing cheques or making cash payments.
Many businesses have adopted this method of making money transfers from one bank account to another and it is available on the mobile apps as well. RTGS stands for Real Time Gross Settlement and NEFT is the acronym for National Electronic Funds Transfer. While the former is meant for large value transactions starting from Rs 2 lakhs upwards, for transactions below this amount, the NEFT is used.
RBI earlier levied a fee on the banks for facilitating these transactions through its servers and the banks in turn have been debiting the accounts of their customers after each transaction. Effective Monday, July 1, this charge stands eliminated. If you are holding an account with India’s largest public sector bank, the SBI, you would have been paying Rs 5 or below for NEFT and the charges for RTGS vary from Rs 5-50 depending on the value of the transactions.
There has been the contentious issue of penalties being charged by banks for non-maintenance of average minimum balance by savings bank account holders. While RBI has advised the banks not to levy any fees, not all banks have adhered to this. A majority of customers may not even be aware of this.
The other sticking point is the charges for use of ATM. The issue is said to be under the consideration of the RBI, and one may hear of some good news soon on that too.