Fund transfer through Real-Time Gross Settlement (RTGS) and National Electronic Funds Transfer (NEFT) systems is set to become cheaper after the Reserve Bank of India decided it will not impose any charges on such transactions.
After announcing its decision to waive all charges on fund transfer through RTGS and NEFT systems from today, RBI has also asked banks to pass on the benefits to customers from the same day.
The transaction cost comprises two components-RBI’s charges plus banks’ services charges based on the infrastructure cost they incur.
While the share of RBI’s levy goes away, bank charges would continue to exist.
The Real-Time Gross Settlement system is meant for large-value instantaneous fund transfers, while the National Electronic Funds Transfer system is used for fund transfers of up to 2 lakh rupees.
According to Indian Banks’ Association Chairman Sunil Mehta, with a view to push the digital transaction, the RBI has decided not to charge on RTGS and NEFT transactions. He stated that the move will help banks reduce the fees from customers for these transactions.
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