Electronic Funds Transfer Infrastructure in India – Usage of RTGS and NEFT

Electronic Funds Transfer Infrastructure in India – Usage of RTGS and NEFT

RBI/2010-11/259
DPSS (CO) RTGS No.1008/04.04.002/2010-2011

November 03, 2010

Chairman and Managing Director /
Chief Executive Officer of all banks participating in RTGS and NEFT

Madam / Dear Sir,

Electronic Funds Transfer Infrastructure in India – Usage of RTGS and NEFT

Please refer to our earlier circulars DPSS (CO) RTGS No. 729/04.04.002/2006 – 2007 dated December 1, 2006 (introducing the threshold value limit for customer transactions in RTGS to Rs 1 lakh) and DPSS (CO) No. 611 / 03.01.03 (P) / 2008 – 09 dated October 8, 2008 (levy of service charges for electronic payment products).

2. The Indian RTGS system has displayed tremendous growth in both transactions volume and the values that it has been processing since its inception in March, 2004. With the increasing number of electronic payment transactions, it has become expedient to position the Indian RTGS system primarily for processing and settling large value payment orders. Further, RBI has set up a robust retail electronic funds transfer system in the form of National Electronic Funds Transfer (NEFT) system, with near real-time settlement finality with 11 settlement cycles in a day.

3. It has, therefore, been decided in consultation with system participants to increase the threshold value limit for RTGS transactions from the present limit of ` 1 lakh to ` 2 lakhs. As an incentive to customers to move their transactions to NEFT, a new value band in the ` 1 lakh to ` 2 lakh segment has been created, with customers having to pay lower charges vis-à-vis RTGS transactions. The details of the existing service charges and the revised service charges are given below :

4. The service charges in the value band ` 1 lakh to ` 2 lakhs at ` 15/- per transaction in NEFT, effectively provides a saving of ` 10/- per transaction to the customer. Thus, the special niche value band created in NEFT, is a value proposition for customers providing funds transfer in a timely manner with wider geographical coverage at a lesser cost. This measure would also significantly contribute to further improving the efficiency of the RTGS system.

5. The revised threshold limits for customer transactions in RTGS system and revised NEFT service charges will be implemented with effect from November 15, 2010.

6. All member banks are advised to encourage customers to take advantage of this facility.

Please acknowledge receipt.

Yours faithfully,

(G. Padmanabhan)
Chief General Manager

__________________

Note : Circular DPSS (CO) No. 611 / 03.01.03 (P) / 2008 – 09 dated October 8, 2008 is mentioned below

Levy of Service Charges for Electronic Payment Products and Outstation Cheque Collection

RBI / 2008-09 / 207
DPSS.CO.No. 611 / 03.01.03(P) / 2008-09

October 8, 2008

The Chairman and Managing Director / Chief Executive Officer
All Scheduled Commercial Banks including RRBs /
Urban Co-operative Banks / State Co-operative Banks /
District Central Co-operative Banks

Madam / Dear Sir,

Levy of Service Charges for Electronic Payment Products and
Outstation Cheque Collection

With immediate effect, the framework of charges to be levied by banks for offering various electronic products and for outstation cheque collection service shall be as under : –

1.   Electronic products

a) Inward RTGS / NEFT / ECS transactions – free, no charge to be levied.

b)   Outward transactions –

(i)  RTGS – Rs. 1 to 5 lakh            – not exceeding Rs. 25 per transaction
               – Rs. 5 lakh and above   – not exceeding Rs. 50 per transaction

(ii) NEFT  – Up to Rs. 1 lakh          – not exceeding Rs. 5 per transaction
               – Rs.1 lakh and above    – not exceeding Rs. 25 per transaction

c)   Banks may prescribe charges not higher than cheque return charges for ECS debit returns.

d)   These charges shall be applicable for all types of transactions, including inter-bank funds transfers.

2.   Outstation cheque collection

a)   – Up to Rs. 10,000                     – not exceeding Rs. 50 per instrument
      – Rs. 10,000 to Rs. 1,00,000      – not exceeding Rs. 100 per instrument
      – Rs.1,00,001 and above            – not exceeding Rs. 150 per instrument

b)   The above charges will be all inclusive.  No additional charges such as courier charges, out of pocket expenses, etc., should be levied from the customers. 

c)   To reduce the clearing cycle and to promote electronic modes of payment, the drawee banks should use electronic modes like RTGS / NEFT, wherever available, to remit proceeds to the collecting bank branch.

d)   Banks may make increased use of Speed Clearing and National Clearing facilities for providing efficient service.

3. The above charges are applicable only to transactions originated and payable within India.

4.  The provisions of this circular shall not be applicable to cash handling charges levied by banks for handling large value cash transactions.

5.  No bank should refuse to offer the products to its customers or decline to accept outstation cheques deposited by its customers for collection.

6. These Directions are issued by the Reserve Bank of India, in exercise of the powers conferred by Section 18 of the Payment and Settlement Systems Act, 2007 (Act 51 of 2007), without prejudice to permissions / approvals, if any, required under any other law.

Yours faithfully

(G. Padmanabhan)
Chief General Manager