In a move that gives a big thrust to
online fund transfers, the Reserve Bank of India (RBI) today announced that the
National Electronic Funds Transfer (NEFT) systems would be available on a 24x7
basis from December 2019.
At present, the NEFT payment
system operated by the Reserve Bank as a retail payment system is available to
customers from 8am to 7pm on all working days of the week (except 2nd and 4th
Saturdays, and all Sundays of the month).
The Chief digital officer of
a private bank, requesting anonymity, said, “These days 70-80 per cent of the
bank’s customer transactions are taking place digitally. So, this is a positive
step from the central bank to boost digital banking transactions as mentioned
in the Payment System Vision 2021 document.”
In June, during the second
monetary policy meeting, the Reserve Bank of India (RBI) announced the removal
of charges levied by the Central Bank for transactions processed in the Real
Time Gross Settlement System (RTGS) and National Electronic Funds Transfer
(NEFT) systems. It became effective from July 1.
However,
there was a misconception among customers that, effective July 1, there will be
no charges on RTGS and NEFT based money transfers online. It boils down to
there being two major cost components. First is what the RBI used to charge
banks for the online transfer facility and the second being banks' own costs
while offering the option to customers. RBI had waived the first component. It
is up to the banks to decide if they wish to remove or retain the second cost
component.