The Reserve Bank of India (RBI) has directed banks not to charge savings account holders for NEFT with effect from January 2020.
The National Electronic Funds Transfer (NEFT) is an electronic funds transfer system maintained by the RBI, to transfer funds from one bank account to another. Money transfer can be made by an individual or company to an individual or company's bank account with any bank that is a member of the NEFT scheme, according to the RBI .
The RBI said earlier that it had done away with charges on NEFT and RTGS transactions.
"In order to provide an impetus to digital funds movement, it has been decided to do away with the charges levied by the Reserve Bank for transactions processed in the RTGS and NEFT systems. 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 had said in a statement.
Presently, for RTGS transactions between Rs 2-5 lakh, a maximum fee of Rs 30 is charged, while for transactions above Rs 5 lakh, a maximum of Rs 55 is charged. However, the actual fee depends on the time of the day when a user initiates transactions. Banks could decide to charge any amount not exceeding the rates stipulated by RBI.
Similarly, for NEFT transactions originating at bank branches, a maximum of Rs 2.50 (+GST) is charged for transactions up to Rs 10,000. For transactions above Rs 10,000 up to Rs 1 lakh, a maximum of Rs 5 (+GST), and Rs 15 (+GST) for transactions above Rs 1 lakh and up to Rs 2 lakh is charged. For transactions above Rs 2 lakh, a maximum of Rs 25(+GST) is charged.
RTGS is meant for large-value instantaneous fund transfers while the NEFT is used for fund transfers up to Rs 2 lakh.
With IANS inputs