SBI vs HDFC Bank: Charges levied on IMPS, RTGS, NEFT transactions compared

With RBI and NDA government both focused on increasing digital transactions, the largest lender State Bank of India (SBI) has made its first move. Last week, SBI waived off RTGS and NEFT charges for transactions carried on YONO app, internet banking and mobile banking with immediate effect. Similarly, SBI also waived off IMPS charges. However, with effect from August 01, 2019. This will benefits over six crore SBI internet banking customers and 1.41 crore mobile users. Aound one crore users of SBI Yono app will also benefit. Interestingly, this move of SBI was already carried by HDFC Bank back in 2017. Also, a point of note is that SBI’s RTGS, IMPS and NEFT transactions are still coupled with charges if carried through branches. 

P.K. Gupta, MD (Retail & Digital Banking), SBI said, “One of our bank’s core strategies is to provide convenience to customers and encourage them to take the digital route for transferring funds. In sync with our strategy and Government of India’s vision to create a digital economy, SBI has taken this step to promote the use of YONO, internet banking and mobile banking for doing NEFT and RTGS transactions without incurring any cost.”

In a notification, SBI said, “Additionally bank has already reduced NEFT and RTGS charges for customers transacting through branch network by 20% across all slabs.” 

Simply put, there are no waivers for those who carry IMPS, NEFT and RTGS transactions at SBI branches. However, the fees are definitely lowered in past couple of years. 

During second bi-monthly monetary policy of FY20, RBI stated it will waive off charges levied on banks for NEFT, RTGS and IMPS transactions. The central bank made it clear that even banks will be required to follow the same suit. 

Things got even clearer for free NEFT, RTGS and IMPS transactions when Finance Minister Nirmala Sitharaman said in Union Budget 2019 speech that “there are low-cost digital modes of payment such as BHIM UPI, UPI-QR Code, Aadhaar Pay, certain Debit cards, NEFT, RTGS etc. which can be used to promote less cash economy.”

Sitharaman further said, “I, therefore, propose that the business establishments with annual turnover more than Rs 50 crore shall offer such low-cost digital modes of payment to their customers and no charges or Merchant Discount Rate shall be imposed on customers as well as merchants." The FM reiterated that such cost will be borne by RBI and banks.

After SBI one can expect other banks to follow suit. However, one can be assured that NEFT and RTGS transactions carried at branches are subject to charges. 

What State Bank of India offers

At branches, if a person does NEFT  transaction up to Rs 10,000, then Rs 2.50 is levied. While for above Rs 10,000 to Rs 1 lakh, Rs 5 is levied. Meanwhile, Rs 15 to Rs 25 are levied on transactions above Rs 1 lakh to Rs 2 lakh and above. These are exclusive of GST charges. 

In case of RTGS transaction of Rs 2 lakh to Rs 5 lakh, Rs 25 is levied. While Rs 50 is imposed on above Rs 5 lakh transactions. 

What HDFC Bank offers

The private lender has waived off charges on NEFT, RTGS transactions done online since November 2017. However, at branches, Rs 2 plus GST is charged on up to Rs 1 lakh transactions. Also, Rs 10 plus GST is levied on above Rs 1 lakh to Rs 10 lakh. 

On any RTGS transaction from HDFC Bank branch, Rs 15 plus GST is levied. However, it needs to be noted that banks have different timings scheduled for carrying RTGS transactions and accordingly charges are modified.