RBI extends electronic fund transfers to cover all licensed banks

The Reserve Bank of India has come out with some announcements to further popularise the electronic payment systems.

The apex bank has announced that all licensed banks across the country would be able to take part in the centralised electronic payment systems and has followed it up with a notification dated 9 April the RBI announcing that it would be expanding the sub-membership route.

According to the RBI's notification, ''this decision has been taken to popularise electronic transfer of funds. At present, the centralised payment systems can be accessed only by members that include public and private sector banks.''

The central bank has allowed regional rural banks (RRBs), urban co-operative banks, state co-operative banks and district central cooperative banks to participate in the national electronic funds transfer (NEFT) system as also the real time gross settlement system (RTGS).

NEFT allows electronic transfer of funds and is meant for retail customers, while RTGS system serves to effect high-value transfer of money with a threshold limit of Rs2 lakh.

Currently, RTGS and NEFT, which are centralised payment systems -- can be accessed only by member public and private sector banks with  RRBs given access to the NEFT system through their sponsor banks, as an exception.