Allow customers to use electronic payment: RBI
14 April 2012
The RBI has advised all banks to let customers use the 'national electronic funds transfer' (NEFT) facility for loan repayments.
This directive follows the Reserve Bank of India receiving a number of complaints from customers regarding non-acceptance of NEFT for credit to loan accounts, which caused inconvenience to them, according to a PTI report.
Following examination of the complaints, the RBI says it found that only a few banks were following the restrictive practice of not allowing use of NEFT for credit to loan accounts, but were willingly using Electronic Clearing System as one of the modes for the repayment the report said.
''It is, therefore, advised that all banks should allow the customers to choose NEFT also as one of the electronic modes of making payment towards loan EMIs / repayments, etc.,'' the RBI said in a statement.
Launched in 2005, the system allows one-to-one funds transfer and can be used for transferring funds to beneficiaries (individual, institutions etc.) and no restrictions had been placed thereon.
In March 2012, the total number of NEFT transactions recorded by the banking system stood at 2.71 crore for value aggregating Rs2.40-lakh crore.