Banking charges are definitely a grey area for many customers. Let’s face it; most of us don’t really bother when it comes to learning more about these charges only to suddenly pipe up later about deductions on this account by our banks. If this is a common scenario in your banking journey, you should definitely know more about charges for all banking transactions that are deducted from your account. On that note, there is a new welcome development for customers which should bring a smile to your face.
The Reserve Bank of India (RBI) has waived the charges imposed on transferring funds via NEFT (National Electronic Funds Transfer) and RTGS (Real Time Gross Settlement). This will also lead to lower charges for customers of Indian banks who are transferring funds.
NEFT and RTGS to cost less from now onwards
The RBI has brought about a welcome change in the Indian banking system in terms of charges imposed on fund transfers. Here’s learning more about the same:
- RBI has waived off fund transfer charges on NEFT and RTGS fund transfers.
- The apex bank has also directed all Indian commercial banks to pass on all the benefits to customers.
- The charges have been waived with immediate effect.
- The new decision of the RBI will lead to reduced fund transfer costs for all banking customers.
- Post a review of the multiple charges imposed by member banking institutions for NEFT and RTGS transaction processing, the RBI has directed all banks to follow the recent mandate.
- RTGS is deployed for real-time transfer of funds higher than Rs. 2 lakh and NEFT is used for transferring funds up to Rs. 2 lakh.
- Sunil Mehta, the Chairman of the Indian Banks’ Association, has already confirmed that the decision of the RBI will enable Indian banks to lower fees for payments via NEFT and RTGS.
- SBI, the country’s biggest bank, imposes a charge of Rs. 1-5 for transactions via NEFT. Charges between Rs. 5-50 are also imposed for RTGS transactions.
- The RBI is striving to emphasize on digital fund transfers with a view towards encouraging the same with these decisions.
- RBI used to impose minimum charges on commercial banks for transactions via the NEFT and RTGS systems and banks used to impose charges on customers in turn.
- The time window for RTGS has been increased by RBI by 1 ½ hours for banking customers.
- The earlier timing for RTGS transactions was until 4.30 PM and this has gone up to 6 PM.
Customers should certainly appreciate the lower charges on RTGS and NEFT transactions and this will certainly encourage a rising volume of transactions via these two channels.
Learning more about RTGS and NEFT
NEFT or National Electronic Funds Transfer and Real Time Gross Settlement (RTGS) do have their differences. You should always know more about the same prior to agreeing to online fund transfers. Here are some key details worth keeping in mind:
- The window for RTGS transactions is now between 9 AM and 6 PM on weekdays and between 9 AM and 1.30 PM on Saturdays.
- NEFT windows are between 8 AM and 6.30 PM between Monday and Saturday.
- Timings can vary from one bank to another and NEFT transactions are more flexible as compared to RTGS.
- NEFT transfers take place in batches and hence there could be some delays for funds to be actually transferred.
- RTGS takes place on a real-time basis. In this case, the bank which is the beneficiary, gets the instruction for immediate fund transfer when the customer executes the transaction.
- RTGS works for big transactions without any upper limit and the minimum amount is Rs. 2 lakh.
- There is no minimum limit for transferring funds via NEFT. The limit is Rs. 10 lakh for every transaction for banking customers. There is no upper limit for the transaction volumes as well.
- The upper limit is Rs. 50,000 for those who do not have bank accounts but use NEFT for cash deposits and transfers through banking branches which are NEFT enabled.
- The charges for fund transfers vary from one bank to another and now these will reduce even further as per the above details.
- In both cases, customers have to add the beneficiary bank account first to your own account and then wait till the activation process is completed.
- Post confirmation of the beneficiary, funds can be easily transferred to the account that you want.
- Always make sure that you enter information accurately without any slip-ups although these banking systems enable swift fund transfers.
- RTGS deals happen in real-time with settlements being in the books of the RBI (Reserve Bank of India) and this means that all payments done cannot be reversed and are final.
- NEFT transfers cannot be stopped once the bank initiates the transfer in question.
These are the key details that you should know before you start transferring funds via RTGS or NEFT systems. The lower costs should definitely work as an incentive now!