The Reserve Bank of India (RBI) in its Monetary Policy Meet (MPC) on Thursday decided to do away with the Real Time Gross Settlement (RTGS) and National Electronic Funds Transfer (NEFT) charges. In order to give a boost to digital funds movement, the central bank decided to do away with the RTGS and NEFT charges and asked banks to pass on the benefits to 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," the release said.
RBI 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.
The RBI has also decided to set up a committee to review the charges levied on the use to ATMs as the usage by the public has been growing significantly.
Earlier, RBI had extended the time window for RTGS by one-and-a-half hour for bank customers with effect from 1 June 2019. Previously the timing for any RTGS transaction was till 4:30 pm. Now it has been extended to 6 pm. The final cut-off for inter-bank transactions will be 7:45 pm.
Under RTGS, there is a continuous and real-time settlement of fund transfers, individually on a transaction by transaction basis (without netting).
In a widely expected move, RBI cut its policy interest rate by 25 basis points, while also changing its monetary policy stance to 'accommodative' from 'neutral' after the economy grew at its slowest in over four years.
The six-member monetary policy committee (MPC) cut the repo rate to 5.75%, the reverse repo rate was reduced to 5.50%.
