Online Banking Customer? Your RTGS, NEFT transfers to get cheaper from tomorrow

Here's good news for online banking users. From tomorrow, fund transfer through RTGS and NEFT systems would become cheaper, days after the Reserve Bank of India (RBI) announced its decision to not impose any charges on such transactions. The central bank had announced early this month that it will waive all charges on fund transfer through RTGS and NEFT systems from July 1, the Reserve Bank of India (RBI) had also asked the commercial banks to pass on the benefits to customers from the same day.

What the RBI said

The Reserve Bank 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. In order to provide an impetus to digital funds movement, it has been decided to do away with the charges levied by the Reserve Bank for transactions processed in the RTGS and NEFT systems. Banks will be required, in turn, to pass these benefits to their customers. Instructions to banks in this regard will be issued within a week.

RTGS (real-time gross settlement) system is meant for large-value instantaneous fund transfers. NEFT (national electronic funds transfer) system is used for fund transfers of up to Rs 2 lakh.

Commenting on RBI decision, Indian Banks' Association Chairman Sunil Mehta said in IBA's newsletter: "With a view to push the digital transaction, the RBI has decided not to charge the RTGS and NEFT transactions. This would help banks reduce the fees from customers for these transactions," 

State Bank of India charges between Re 1 and Rs 5 for transactions through NEFT and between Rs 5 and Rs 50 for RTGS.