No NEFT Charge for Saving Account Holders from January 2020: RBI

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In an attempt to promote and increase the number of digital payments, RBI this month directed the Banks to no more charge any extra amount from the saving account holders who are doing National Electronic Funds Transfer (NEFT) for payments. Earlier, RBI has also removed the processing charge that was imposed on its customers for doing NEFT.

State Bank of India in July became the first Bank to waive charges incurred by their customers on availing NEFT services and Real-Time Gross Settlement (RTGS) when transferring money through Mobile Banking or Internet Banking. Additionally, SBI waived the extra changed that was payable when using Immediate Payment Service (IMPS) when transferring money from the mobile application.

SBI in its statement said, “To provide an impetus to digital funds movement, SBI waived-off RTGS and NEFT charges for YONO, internet banking (INB) and mobile banking (MB) customers from July 1, 2019. The bank will also waive-off IMPS charges for its INB, MB and YONO customers effective from August 1, 2019.” 

After SBI, many other Banks have either reduced the charged or have waived the extra charges the customers pay during the NEFT transaction.

However, the RBI directive will now make it mandatory for the Banks do not charge any extra amount from saving accounts holders when they are using NEFT as a mode to transfer funds. The circular was released on November 7, 2019, with an object to empower the people to use e-payment methods and give them various other option to do e-payment.

This move came at a time when the government is planning to make electronic toll collection compulsory on the national highways by using FASTags. RBI said, “it enables the processing of e-mandates for transactions through UPI. It permits all authorised payment systems and instruments (non-bank PPIs, cards and UPI) for linking with National Electronic Toll Collection (NETC) FASTags. Going forward, this will facilitate the use of FASTags for parking, fuel, etc., payments in an interoperable environment.”

Further, RBI is also planning to operationalise the Acceptance Development Fund from January 1, 2020. Additionally, the committee will be set up, which will be assessing the need for a plurality of the QR Codes.

What is NEFT?

NEFT is an electronic mode of transferring the money to any person whose bank is a part of the scheme. It is pertinent to know that NEFT allows same as well as the inter-bank transfer of funds and it is available between 8 am to 7 pm for its customers on all the working days excluding second and fourth Saturdays of every month. NEFT fund transfer scheme is available for a money transfer of amount Rs 2 lakh or more.

As per the electronic payment system data of the RBI which is there on the National Payments Corporation of India (NPCI) website, there is a manifold increase in the number of online transactions after demonetisation came in India. The number of online payment rose to 97.55 crores in December 2016 from 67.15 crores.

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