The RBI justified this by saying that banks will now have to pass on these benefits to its customers.
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Users who make fund transfers via RTGS and NEFT will not have to pay additional charges.
Reserve Bank of India (RBI) in its bi-monthly meet of the Monetary Policy Committee (MPC) decided to remove all charges levied on Real Time Gross Settlement System (RTGS) and National Electronic Funds Transfer (NEFT) System.
RBI in its statement on Thursday said that the move was to provide an impetus to digital funds movement.
As of now, the RBI levies minimum charges on banks for transactions routed through its RTGS, meant for large-value instantaneous fund transfers and the NEFT System for other fund transfers. Banks, in turn, levy charges on their customers.
Going forward, banks will be required to pass on these benefits to their customers. The RBI said that instructions to banks in this regard will be issued within a week.
RTGS is a payments system in which transactions – or wire transfers – are processed continuously throughout applicable business hours. On the other hand, in case of NEFT or national electronic funds transfer, the transactions are received up to a particular time are processed in batches. RTGS is meant for transactions of Rs. 2 lakh and above. It enables instant transfer of funds as per applicable timings.
Earlier, the Reserve Bank of India (RBI) announced an extension in the timings applicable to RTGS transfers by one-and-a-half hours.
Source: News18