RTGS is meant for large-value instantaneous fund transfers while the NEFT system is used for fund transfers up to Rs. 2 lakh.
The Reserve Bank of India said it has done away with charges on fund transfers through RTGS and NEFT routes to boost digital transactions and asked banks to pass on the benefits to customers. The Real Time Gross Settlement System (RTGS) is meant for large-value instantaneous fund transfers while the National Electronic Funds Transfer (NEFT) System is used for fund transfers up to Rs 2 lakh.
Here are 5 things to know about RBI’s announcement:
1. In its statement on developmental and regulatory policies after the Monetary Policy Committee’s meeting, RBI said it levies minimum charges on banks for transactions routed through RTGS and NEFT system for other fund transfers. Banks, in turn, levy charges on their customers.
2. It has been decided to do away with the charges levied for transactions processed in the RTGS and NEFT systems in order to provide an impetus to digital funds movement, the central bank said.
3. RBI has also decided to set up a committee to review the charges levied on the use to ATMs as the usage by the public has been growing significantly.
5. Recently, the Reserve Bank of India (RBI) also extended the timings applicable to RTGS transfers by one-and-a-half hours. The new timings – from 8:00 am to 6:00 pm (instead of 4:30 pm previously) – came into effect from June 1.
The RBI’s monetary policy committee (MPC) cut its repo rate by 25 basis points to 5.75 percent, changing its policy stance to accomodative from”neutral”.