SBI Online Banking to get a boost as RBI waives off NEFT, RTGS transaction charges

Reserve Bank's latest decision to cut the repo rate, for the third time this year, at 5.75%, lesser than 6% for the first time since 2010, and also to waive off charges linked to National Electronic Funds Transfer (NEFT) and Real Time Gross Settlement (RTGS) transactions is likely to benefit online banking the most. Since SBI is the largest public sector bank in the country with its highly secure internet banking portal, OnlineSBI, providing online services to retail as well as corporate customers, it is likely to be the major beneficiary of the RBI's latest decision. 

Although instructions regarding the same will be issued to banks within a week, the welcome step seems to be the follow-up action to central bank’s last month move to extend the cut-off time for RTGS transactions from 4:30 pm to 6 pm on working days.

Currently, every NEFT transaction carries a charge anywhere between Rs 2.50 to Rs 25 plus 18% GST, and RTGS transaction charge also varies between Rs 25 and Rs 50 along with 18% GST. Several banks have already waived off charges for NEFT transactions when made through internet banking. 

On RBI's decision to do away with NEFT and RTGS charges, Rajnish Kumar, Chairman at State Bank of India yesterday stated, "The move to scrap transaction charges for RTGS & NEFT will boost digital transactions." 

The traditional instant money transfer through NEFT and RTGS will become more attractive, as the same will lead to added convenience and savings for people who need to transfer funds irrespective of the amount and the mode of transfer. 

As we know there’s no limit on NEFT transaction amount, banks often have restrictions in place in terms of maximum online transfer limit in a day like Rs 25 lakh, while RTGS transfers have a minimum limit of Rs 2 lakh.

According to the SBI website, NEFT operates in hourly batches from 8 am to 7 pm on weekdays and 8 am to 1 pm on Saturdays. The RTGS system is the fastest possible interbank money transfer facility available through secure banking channels in India, it added.

The SBI website also informs what mandatory information a customer is required to have to make an RTGS & NEFT payment. The details are given below:

1. Amount to be remitted
2. Account no. to be credited
3. Name of the beneficiary bank
4. Name of the beneficiary customer
5. Sender to receiver information, if any
6. IFSC code of the receiving branch.
7. Mobile number of the remitter.

The amount will be credited to the account basing on the account number only, said the website, adding "As such remitter has should be cautious on the account number while transferring the amounts in electronic mode."