Good News! RBI scraps RTGS, NEFT charges for online fund transfers
By: Sunil Dhawan | Updated: June 6, 2019 2:54:45 PM The Financial Express
RBI Removes RTGS, NEFT Transfer Charges: Reserve Bank of India levies minimum charges on banks for transactions routed through its RTGS and NEFT.
RBI Removes Online Transaction Charges on NEFT, RTGS: Making fund transfer through Real Time Gross Settlement System (RTGS) and National Electronic Funds Transfer (NEFT) System through banking channels will not cost you anything now. In order to provide an impetus to digital funds movement, RBI in its Statement on Developmental and Regulatory Policies has stated that it has decided to do away with the charges levied by it for transactions processed in the RTGS and NEFT systems.
As of now the Reserve Bank of India levies minimum charges on banks for transactions routed through its Real Time Gross Settlement System (RTGS) meant for large-value instantaneous fund transfers and the National Electronic Funds Transfer (NEFT) System for other fund transfers. Banks, in turn, levy charges on their customers.
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NEFT is a nation-wide payment system facilitating one-to-one funds transfer. Under this Scheme, individuals, firms and corporates can electronically transfer funds from any bank branch to any individual, firm or corporate having an account with any other bank branch in the country participating in the Scheme.
As per the RBI website, the structure of charges that can be levied on the customer for NEFT is given below:
a) Inward transactions at destination bank branches (for credit to beneficiary accounts)
– Free, no charges to be levied on beneficiaries
b) Outward transactions at originating bank branches – charges applicable for the remitter
– For transactions up to Rs 10,000 : not exceeding Rs 2.50 (+ Applicable GST)
– For transactions above Rs 10,000 up to Rs 1 lakh: not exceeding Rs 5 (+ Applicable GST)
– For transactions above Rs 1 lakh and up to Rs 2 lakhs: not exceeding Rs 15 (+ Applicable GST)
– For transactions above Rs 2 lakhs: not exceeding Rs 25 (+ Applicable GST)
RTGS is the continuous (real-time) settlement of funds transfers individually on an order by order basis (without netting). ‘Real Time’ means the processing of instructions at the time they are received rather than at some later time; ‘Gross Settlement’ means the settlement of funds transfer instructions occurs individually (on an instruction by instruction basis).
The RTGS system is primarily meant for large value transactions. The minimum amount to be remitted through RTGS is Rs 2 lakh. There is no upper ceiling for RTGS transactions. Depending on the amount and the time of transfer, the RTGS varies. The SBI RTGS Charges varies between Rs 25 and Rs 56 inclusive of taxes.
Going forward, there will not be any such charges and the fund transfer through these channels will not come at a cost. Banks will be required, in turn, to pass on these benefits to their customers. The RBI said that instructions to banks in this regard will be issued within a week.