RBI directs banks to withdraw NEFT and RTGS system charges with effect from July 1

In a move that will bring relief to end-users, Reserve Bank of India (RBI) has directed all banks to cancel National Electronic Funds Transfer (NEFT) and Real-time Gross Settlement (RTGS) charges with effect from July 1.

RBI Goverr, Shaktikanta Das, h anunced decision at central bank's third bi-monthly monetary policy review of 2019, in which big decision was key repo rate being cut by 25 basis points to 5.75 percent - third consecutive cut in as many reviews.

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In dition, RBI changed its monetary policy stance to 'accommodative' from earlier 'neutral' - furr signalling its intent - while GDP projection was justed from 7.2 percent to 7.0 percent for ongoing fiscal. Meanwhile, inflation outlook was somewhere around 3.0 percent to 3.1 percent in first quarter of 2019-20 and 3.7 percent to 3.9 percent in second quarter.

Prior to this, RBI h ordered banks to levy a service charge on fund transfer which included RTGS. A charge of t more than Rs 30 was levied for transactions which summed up to Rs 2,00,000 to Rs 5,00,000. Whereas, for transactions above Rs 5,00,000 maximum charge was Rs 55. Banks across country were allowed to charge a lower rate but exceeding rate was t allowed by RBI.

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NEFT can be used to transact amounts between Rs 10,000 up to Rs 2,00,000, for which charges levied range from Rs 2.50 to Rs 25 for amounts ranging from Rs 10,000 to Rs 2,00,000 respectively.

With this decision, customers can w choose to avail se services without paying a surcharge. changes have been carried out to provide an impetus to digital banking.  

A committee will be set up by RBI which shall involve all stakeholders, under chairmanship of CEO Indian Banks’ Association (IBA), to examine entire gamut of ATM charges and fees. Committee is expected to submit its recommendations within two months of its first meeting.