No levying of charges on NEFT payment from January: RBI to banks
The Reserve Bank of India had stated to banks that from the month of January, the year 2020, the customers might not have to pay any charges relating to the transactions carried out through the popular National Electronic Funds Transfer (NEFT) system.
An offer regarding this has been proposed by the Reserve Bank of India (RBI) in order to provide push towards digital transactions on the 3rd anniversary of demonetization.
The Reserve Bank of India had also suggested that FASTags shall be enabled towards paying for parking fees as well as even at fuel stations.
However, the digital payments established a high 96% of total non-cash retail outflows from October 2018 to September 2019. In the same period, the NEFT, as well as Unified Payments Interface (UPI) systems, touched 252 crores and 874 crore transactions with an annual growth of 20%t and 263%, respectively.
The central bank stated in a statement on furthering digital payments that this rapid growth in the payment systems, inter-alia, was facilitated by means of a series of measures that were taken by the Reserve Bank of India.
Presently to further empower each citizen with an "Exceptional (e) Payment Experience", and furnish them access towards a bouquet of options, the RBI stated that it proposed to mandate the banks regarding not to charge savings bank account customers for online transactions in the NEFT system which shall be in effect from January 2020.
It also suggested operationalizing the 'Acceptance Development Fund' in order to increase the acceptance infrastructure from 1st January 2020.
A committee shall set up for assessing the requirement for the plurality of QR codes as well as the merits of their co-existence or convergence from both systemic as well as customer perspectives.
Furthermore, the Reserve Bank has also planned in order to permit every authorized payment system as well as instruments which includes non-bank PPIs, cards and UPI for linking with National Electronic Toll Collection (NETC) FASTags.
The statement stated that this would facilitate the usage of FASTags for parking, fuel, etc, payments in an interoperable environment.
Also, the central bank proposed to enable the processing of e-mandates for transactions through UPI.
The RBI had made this enouncement on the third anniversary of the government's decision to demonetize old notes of Rs 500 and Rs 1,000. On 8th November 2016, the then notes of Rs 500 and Rs 1,000 have been banned, and the RBI came out with new currency notes of 2,000 and 500.
The Central Bank of India furthermore stated that the benchmarking application commenced by it revealed a high position enjoyed by the nation in many parameters in the payment systems.
RBI furthermore stated that it had facilitated the acceptance of RuPay cards in Bhutan and it would actively involve with the payment system regulators in other jurisdictions as well and share its knowledge in the direction of deriving collaborations and lessening the expenses and time taken for inward remittances, particularly in key remittance corridors.
What is the National Electronic Fund Transfer (NEFT)?
NEFT defined to be a payment system that helps in facilitating the transfer of funds from one bank account to another bank account. One could access this service either through using Internet banking or by means of visiting the bank branch. It must be remembered that not all bank branches are facilitated by this service.
Once a person initiates the transfer of funds, the money reaches the beneficiary account in hours. There is no restriction on the minimum or maximum sum a person could transfer, however, individual banks might put limitations on the per-transaction amount.
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