To promote digital transactions, the Reserve Bank of India (RBI) today abolished its charges on National Electronic Funds Transfer (NEFT) and Real Time Gross Settlement System (RTGS) online money transfer.
To provide a momentum to the digital fund’s movement, RBI in its Statement on Developmental and Regulatory Policies has said that it has decided to do away with the charges levied by it for transactions processed in the RTGS and NEFT systems.
The Reserve Bank levies minimum charges on banks for transactions routed through its RTGS meant for the large-value instantaneous fund transfers and NEFT Systems for other fund transfers.
This move by RBI will make money transfer through RTGS and NEFT cheaper. The central bank has said that banks will be required to pass the benefits to their customers and instructions to banks in this regard will be issued within a week.
The RBI has also decided to review the charges for usage of Automated Teller Machines (ATMs).
“There have been persistent demands to change ATM charges and fees. So to address these issues, the central bank has set up a committee under the chairmanship of the Chief Executive Officer, Indian Banks’ Association (IBA), to examine the entire gamut of ATM charges and fees. The committee is expected to submit its recommendations within two months of its first meeting,” RBI said in a statement.
The central bank will also issue draft guidelines for on tap licensing of small finance banks by the end of August 2019.
“A review of the performance of small finance banks reveals that they have achieved their priority sector targets and thus attained their mandate for furthering financial inclusion,” RBI said in a statement.
The central bank also said that there is a case for more players to be included to enhance access to banking facilities to the small borrowers and to encourage competition.
To ensure transparent pricing for users of foreign exchange (such as Small and Medium Enterprise (SME) exporters and importers, individuals, etc.), Clearing Corporation of India (CCIL) has developed a forex trading platform and it is being tested by users. RBI expects the forex platform to be available to users for transactions from early August 2019.
“This platform would provide transparency of pricing and promote competition among market-makers leading to better pricing for all customers, regardless of order size,” the RBI said.
The central bank has earlier extended the RTGS time window meant for customer transactions (initial cut-off) from 4.30 pm to 6 pm.