After the Reserve Bank of India (RBI) scrapped charges on NEFT transactions another major move has now been made in the digital payment space today. In what will bring joy to net banking customers, they will soon be able to carry out NEFT transactions 24X7 – anytime and anywhere. So far, only UPI and IMPS transactions are allowed 24X7 by banks, companies and other institutions. RBI in its third bi-monthly monetary policy decided to open the window to carry NEFT transactions any time. Earlier there were specific time and period imposed when you could carry out NEFT transactions. The new move will be implemented from December 2019.
In a notification, RBI said, “As mentioned in the Payment System Vision 2021 document, the Reserve Bank will make available the NEFT system on a 24×7 basis from December 2019. This is expected to revolutionise the retail payments system of the country.”
Currently, the National Electronic Funds Transfer (NEFT) payment system operated by the Reserve Bank as a retail payment system is available for customers from 8.00 am to 7.00 pm on all working days of the week (except 2nd and 4th Saturdays of the month).
On RBI’s latest move, Rajnish Kumar, Chairman at SBI said, “On the development and regulatory front, the decision to make available the NEFT platform on 24/7 basis, coupled with on-tap authorisation will add depth to retail payments (currently around 85 lakh transactions on a daily basis).”
During second bi-monthly monetary policy of FY20, RBI stated it will waive off charges levied on banks for NEFT, RTGS and IMPS transactions. The central bank made it clear that even banks will be required to follow the same suit.
Things got even clearer for free NEFT, RTGS and IMPS transactions when Finance Minister Nirmala Sitharaman said in Union Budget 2019 speech that “there are low-cost digital modes of payment such as BHIM UPI, UPI-QR Code, Aadhaar Pay, certain Debit cards, NEFT, RTGS etc. which can be used to promote less cash economy.”
Sitharaman in the speech said, “I, therefore, propose that the business establishments with annual turnover more than Rs 50 crore shall offer such low-cost digital modes of payment to their customers and no charges or Merchant Discount Rate shall be imposed on customers as well as merchants.” The FM reiterated that such cost will be borne by RBI and banks.”
Following the development, SBI waived off RTGS and NEFT charges for transactions carried on YONO app, internet banking and mobile banking with immediate effect in July 2019. Similarly, SBI also waived off IMPS charges. However, with effect from August 01, 2019. Interestingly, this move was already carried out by HDFC Bank back in 2017. Also, a point of note is that SBI and HDFC Bank’s RTGS, IMPS and NEFT transactions are still coupled with charges if carried through branches. Hence, now carrying NEFT transactions via internet or mobile banking has become even more amazing.
Being launched since 2005, this platform is a nation-wide payment system. Here, any customer can transfer funds electronically from any bank branches to other individuals who are having similar bank account or other banks as well. The transactions in this platform are settled in batches and have different timings. This means, any transfer made after a specified batch time, the customer will have to wait till next designated schedule for successful transactions.
One can carry an NEFT transaction both offline and online. To carry NEFT at bank branch, you will have to visit and submit details of the transaction in a piece of paper given by the lender. If the account is within the same bank, the time period for completion of the transaction is generally on the same day in few hours. If transfer is done in other bank account, then time taken can be a whole day or even may take upto 2 days.
In regards to online mode, you will have to add payee details either be same or other bank account. After adding payee, one has to wait at least 30 minutes to carry the transactions.