The Reserve Bank of India (RBI) decided to remove charges on RTGS (Real Time Gross Settlement) and NEFT (National Electronic Funds Transfer) transactions to promote digital payments and make electronic fund transfers more affordable for customers.
What is RTGS?
RTGS is a fund transfer system where money is transferred from one bank account to another on a real-time and gross settlement basis. It is mainly used for large-value transactions, and the transfer is processed immediately without waiting for batch settlement.
What is NEFT?
NEFT is an electronic payment system that allows individuals, businesses, and organizations to transfer funds from one bank account to another across India. Transactions are settled electronically and are available 24×7.
RBI’s Decision
To encourage digital banking and reduce the cost of electronic transactions, RBI removed the processing charges levied on banks for RTGS and NEFT transactions. Following RBI’s decision, banks were advised not to charge customers for online RTGS and NEFT fund transfers.
Benefits of Removing Charges
- Promotes digital payments and cashless transactions.
- Reduces the cost of transferring money electronically.
- Encourages customers to use online banking channels.
- Improves financial inclusion by making fund transfers more affordable.
- Supports the government’s vision of a digital economy.
Conclusion
The removal of RTGS and NEFT transaction charges by the RBI was an important step toward promoting digital banking in India. It made electronic fund transfers cheaper, faster, and more accessible, encouraging greater adoption of digital payment systems across the country.