In a relief for the common man, the Reserve Bank of India has decided to do away with charges levied on RTGS and NEFT transactions. In addition to it, it has also instructed the banks to pass this benefit to their customers.
Headed by Governor Shaktikanta Das, the RBI's announcement comes in its third bi-monthly monetary policy review of 2019, in which the big decision was the repo rate being cut by 25 basis points to 5.75 percent - the third consecutive cut in as many reviews. Additionally, the RBI's monetary stance was shifted to 'accommodative' from 'neutral' earlier. The GDP projection, meanwhile, was adjusted from 7.2 percent to 7.0 percent and the inflation outlook is estimated to be at 3.0 percent to 3.1 percent in the first half of 2019-20 and 3.7 percent to 3.9 percent in the second half of the year.
Earlier, the RBI had instructed the banks to levy a service charge for the transfer of funds using the RTGS. For transactions above Rs 2,00,000 up to Rs 5,00,000, a charge of not more than Rs 30 was allowed to be charged by the banks. For transactions above Rs 5,00,000, the charge was capped at Rs 55. Banks were given the freedom to charge a lower rate but were not allowed to exceed the rate fixed by the RBI.
NEFT can be used to transact amounts between Rs 10,000 up to Rs 2,00,000, for which the charges levied range from Rs 2.50 to Rs 25 for amounts ranging from Rs 10,000 to Rs 2,00,000 respectively.
With these charges put away, the customer can now avail these services without having to pay an additional charge. In order to provide an impetus to digital banking, it has been decided to scrap the charges levied by the Reserve Bank for transactions processed in the RTGS and NEFT systems. RBI has been decided to set up a Committee involving all stakeholders, under the chairmanship of CEO Indian Banks’ Association (IBA), to examine the entire gamut of ATM charges and fees. The Committee is expected to submit its recommendations within two months of its first meeting.