RBI Removes Charges on NEFT& RTGS: What You Need to Know

This Thursday came up with a flurry of good news for banking customers. Be it a decision of the RBI to cut repo rate or be it a decision of the central bank to remove charges levied on NEFT and RTGS in order to push the digital transactions across the country or the decision to review the current charges levied on the usage of ATMs. So here is what you need to know.

What is NEFT & RTGS?

The National Electronic Fund Transfer System (NEFT) is used for fund transfer up to Rs 2 lakh. And the Real Time Gross Settlement (RTGS) is meant for large value fund transfer.  Country’s largest bank SBI levy charges of Rs 1 to Rs 5 for transaction through NEFT and Rs 5 to 50 for RTGS route. However, according to the ICICI bank website, the current RTGS charges by ICICI are in the range of Rs 25 to 50 plus additional GST for  transaction amount in range of Rs 2 lakh to Rs 10 lakh. And HDFC bank levies no charge for RTGS, according to their website. A few days back the RBI has announced an extension in the timing applicable to RTGS transfer by one and a half hour. With effect from June 1, the cut off time for RTGS transaction will be till 6 pm for the customers.

RBI Is Reviewing ATM Charges Too

Seeing the exponentially rising use of ATM, the RBI has also decided to constitute a committee that will review charges levied on the use of ATMs. And will also review its interchange fee structure. In its statement on the development and regulatory policies, the RBI said that a committee will involve all the stakeholders under the chairmanship of CEO, Indian Banks Association and will take into consideration all sorts of ATM charges and fees. This committee is supposed to submit its report and recommendations within two months of its first meeting. Also, the information regarding the committee's composition and terms of reference will be issued within a week.

Normally, the bank, which issues ATMs allows a certain number of free transactions. However, you are charged for using ATMs of other banks for a transaction beyond a certain number. For example, HDFC bank offers five free cash withdrawal transaction per month at Non-HDFC Bank ATM and additional transaction done at Non-HDFC Bank ATM: Rs 20/- per transaction (Per transaction limit will be Rs 10,000. And State Bank of India, the country’s largest lender by assets, offers the same number of free transactions in both metro and non-metro locations. Thereafter it charges, Rs 20 plus GST per financial transaction and Rs 8 plus GST for the non-financial transaction as mentioned on its website.