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Fund transfer through NEFT and RTGS gets cheaper from today

Fund transfer through NEFT and RTGS gets cheaper from today

RBI announced the waiver of all charges on fund transfer through RTGS and NEFT system. Bank customers to enjoy the benefits from today.

Indian bank account holders will be at ease as RBI has announced the waiver on charges that were imposed for fund transfer through NEFT or RTGS system.

After RBI passed the decision of waiver of charges, it also announced the application of the same from 1st July 2019. Therefore the bank customers will enjoy such benefits from today.

Why are RTGS and NEFT much used for fund transfer in India?

RTGS system is used for transferring bulk amount, whereas, NEFT is used to transfer a denomination up to INR 2 lakhs. Country’s largest bank, SBI charges between Re 1 to Rs 5 for NEFT whereas Rs 5 to Rs 50 for RTGS fund transfers.

The levy on such charges is an initiative to promote digital fund transfer said Sunil Mehta, Indian Bank’s Association’s chairman. He further added, “With a view to push the digital transaction, the RBI has decided not to charge the RTGS and NEFT transactions. The steps taken by RBI will help banks to reduce the fees from customers for these transactions.”

RBI has further constituted a committee which is headed by IBA Chief Executive V G Kannan, who will be responsible for examining the ATM charges that are charged by banks and amid demands for reviewing the levies. The committee is formed by keeping in mind the significant growth in the use of ATM and the persistent need to change ATM charges.

To provide an impetus to digital funds movement, the central bank had decided to do away with the processing charges and time-varying charges levied on banks by the RBI for outward transactions through the RTGS, as also the processing charges for transactions processed in NEFT will be waived by the Reserve Bank of India. All this is done to promote digital banking in India and thus take a step forward towards digital India.

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