The Reserve Bank of India on Tuesday said it would waive all charges on fund transfers through the RTGS and NEFT systems from July 1 to encourage digital transactions. It said banks should pass on benefits accrued from the waiver to customers.

“In order to provide an impetus to digital funds movement, it has been decided that with effect from July 1, 2019, processing charges and time varying charges levied on banks by Reserve Bank of India for outward transactions undertaken using the RTGS system, as also the processing charges levied by RBI for transactions processed in NEFT system will be waived by the Reserve Bank,” the central bank said in a statement.

The Real Time Gross Settlement system is meant for immediate transfer of large-value funds, while the National Electronic Funds Transfer system allows fund transfer of up to Rs 2 lakh. The State Bank of India, the largest bank in the country, charges between Rs 1 and Rs 5 for NEFT transactions and between Rs 5 and Rs 50 for RTGS transfers, PTI reported.

The central bank’s decision to waive the charges came days after its monetary policy meeting. In a statement issued following the meeting, the central bank had announced that these charges would be waived.