Misc NEFT & RTGS Bank Payment Charges Removed by RBI to Promote Digital...

NEFT & RTGS Bank Payment Charges Removed by RBI to Promote Digital Transactions

Reserve Bank of India has removed bank charges for payments via NEFT and RTGS transactions. Now all the payments through NEFT / RTGS mode would be either free or charges would be reduced significantly. Central bank has announced this move in the statement on Developmental and Regulatory policies as part of its monetary policy review. The waiver of charges on payment modes like RTGS/NEFT, RBI wants to increase digital transactions.

RBI’s move of removal of NEFT & RTGS Bank Payment Charges would benefit small traders who deals in small value transactions and operates on small margins for whom every penny counts. This move is a great move for the masses and would encourage digitization of payments & enhances financial inclusion.

Moreover, RTGS / NEFT are much cheaper modes than other payment mechanisms like cheques in terms of the cost involved in managing end to end transactions until settlement.

RBI Removes NEFT / RTGS Bank Payment Charges

RBI levies minimum charges on banks for transactions routed through its Real Time Gross Settlement System (RTGS) and National Electronic Funds Transfer (NEFT). RTGS is meant for large-value instantaneous fund transfers and NEFT System is used for other fund transfers. Banks in turn, levy charges on their customers.

This removal of bank payment charges on NEFT / RTGS transactions will provide digital funds movement. Now RBI decides to levy the charges for transactions processed in RTGS / NEFT systems. Banks would therefore require to pass their benefits to their customers. RBI would issue instructions to banks in this regard within a week duration.

1. National Electronic Fund Transfer (NEFT) System

NEFT payment system facilitate transfer of fund from one bank account to another. One can access this service either by using Internet banking or by visiting the bank branch. It is important to note that not all bank branches are enabled with this service. Once any person initiates fund transfer, the money reaches the beneficiary account within hours. Moreover, there is no limit on minimum or maximum amount on transfer amount. However, individual banks may put restriction on every transaction amount.

The existing NEFT charges of the State Bank of India (SBI) are as follows:-

Amount Charges of Internet Banking Transaction Charges at Bank Branch
Upto Rs. 10,000 Rs. 1 + GST Rs. 2.50 + GST
Above Rs. 10,000 upto Rs. 1 Lakh Rs. 2 + GST Rs. 5 + GST
Above Rs. 1 Lakh upto Rs. 2 Lakh Rs. 3 + GST Rs. 15 + GST
Above Rs. 2 Lakh Rs. 5 + GST Rs. 25 + GST

The above charges are applicable as per transaction basis and attracts GST at the 18% rate.

2. Real Time Gross Settlement (RTGS) Payments

RTGS facility is used to transfer high value amounts and the minimum amount to be transferred is Rs. 2 lakh. Below are the SBI’s charges for RTGS transactions:-

Amount Internet Banking Charges Transaction Charges at Bank Branch
Rs. 2 Lakh upto Rs. 5 Lakh Rs. 5 + GST Rs. 25 + GST
Above Rs. 5 Lakh Rs. 10 + GST Rs. 50 + GST

The above charges are applicable as per transaction basis and attracts GST at 18% rate. RTGS fund transfer can only be initiated b/w Monday and Saturday either via internet banking or bank branch.