The Reserve Bank of India on Thursday decided to scrap charges levied on digital transactions through Real-Time Gross Settlement system, or RTGS, and National Electronic Funds Transfer, NEFT, in an effort to boost the “digital funds movement”.
In a press statement, the central bank said banks will now be required to pass these benefits to their customers. The instructions to banks in this regard will be issued within a week, it said.
The Real-Time Gross Settlement System is a payment system meant for instantaneous transactions of Rs 2 lakh or above. National Electronic Funds Transfer, or NEFT, is used for other transfers where the transactions are received up to a particular time every day and are processed in hourly batches. There is no limit for the minimum or maximum amount for fund transfer. In RTGS, transactions are processed continuously throughout business hours.
On May 29, the Reserve Bank of India had extended the time window for RTGS transactions by one-and-a-half hours to 6 pm with effect from June 1.
The RBI on Thursday also set up a committee to examine ATM charges and fees. The committee, led by the chief executive officer of Indian Banks’ Association, will submit its recommendations within two months of its first meeting.
The Reserve Bank of India also lowered the repo rate by 25 basis points to 5.75%. The decision was announced after a three-day meeting of the Monetary Policy Committee, headed by RBI Governor Shaktikanta Das. The reverse repo rate, too, was lowered to 5.50% from 5.75%.