Scrapping RTGS, NEFT charges to boost digital transactions: SBI Chairman, Rajnish Kumar

The 25 basis points cut in policy repo rate was not the only the exciting announcement made by RBI on Thursday. In fact, the traditional instant money transfer mode namely National Electronic Fund Transfer (NEFT) and Real Time Gross Settlement (RTGS) platforms will become more attractive. How? Well, RBI has decided to do away with charges that it levies on banks. By eliminating the charges, bank will also have to pass on the benefits to customers. In simple words, there will be no charges on NEFT and RTGS transactions. 

Talking about RBI's decision over NEFT and RTGS charges, Rajnish Kumar, Chairman at State Bank of India said, "The move to scrap transaction charges for RTGS & NEFT will boost digital transactions." 

Speaking about the decision to issue draft for “on-tap” licensing of small finance banks, Kumar said, "It will add depth to this sector. Launching of the on-line trading platform for retail participants is a positive development for small & medium forex customers."

"The RBI policy decision to change the policy stance to “ accommodative” will simultaneously help the financial system to navigate to a lower term structure of interest rates and also accommodate growth concerns. On the regulatory front, the decision to lower the Basel III Leverage Ratio will augment the lendable resources of the Bank," said Kumar. 

He added that the RBI intents to harmonize existing regulations for different money market products augurs well for market transparency.

RBI on Thursday said, "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."

Generally, RBI levies minimum charges on banks for transactions routed through its RTGS meant for large-value instantaneous fund transfers and NEFT for other fund transfer. Banks, in turn, levy charges on their customers. 

RBI will soon intimate instruction to banks in this regard within a week.