In a step that will further boost digital transaction, the Reserve Bank of India (RBI) has directed the banks to not charge online transaction fees on National Electronic Funds Transfer (NEFT) transactions by its saving bank account customers with effect from January 2020.
In a press release, the central bank said, “the Reserve Bank mandate banks not to charge savings bank account customers for online transactions in the NEFT system with effect from January 1, 2020.”
Fund transfers through NEFT works based on delayed settlement where payments are settled in batches.
During its October monetary policy review, the RBI made fund transfers through the NEFT round the clock. Earlier, the facility was available till 7.45 pm on working days.
In its press on NEFT charges, the RBI also said, to further empower every citizen with an exceptional payment experience, and provide her access to a bouquet of options:
- Operationalise the Acceptance Development Fund to increase acceptance infrastructure with effect from January 1, 2020.
- Constitute a Committee to assess the need for plurality of QR codes and merits of their co-existence or convergence from both systemic and consumer viewpoints.
- Permit 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.
- Enable processing of e-mandates for transactions through UPI.
The RBI announced that NEFT transactions be made without any charge on the third anniversary of demonetisation. It said, “Digital payments constituted a high 96% of total non-cash retail payments during the period October 2018 to September 2019. During the same period, the National Electronic Funds Transfer (NEFT) and Unified Payments Interface (UPI) systems handled 252 crore and 874 crore transactions with year on year growth of 20% and 263%, respectively. This rapid growth in the payment systems, inter-alia, has been facilitated by a series of measures taken by the Reserve Bank of India.”
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