RBI makes NEFT fund transfers 24/7, asks banks to waive charges
17 December 2019
The Reserve Bank of India (RBI) has directed banks to avoid charging customers for transactions under the National Electronic Funds Transfer (NEFT) after the system became available for all 24 hours of the day and 365 days of the year.
“In order to give further impetus to digital retail payments, it has now been decided that member banks shall not levy any charges from their savings bank account holders for funds transfers done through NEFT system which are initiated online (viz. internet banking and/or mobile apps of the banks),” RBY stated in a notification issued on Monday.
RBI had in circulars issued on 13 July 2012 on National Electronic Funds Transfer (NEFT) System - Rationalisation of customer charges and 11 June 2019 on National Electronic Funds Transfer (NEFT) and Real Time Gross Settlement (RTGS) systems – announced its decision to waive transfer charges.
So far, the National Electronic Funds Transfer (NEFT) facility was only between 8 am and 6:30 pm and on those days when banks were open.
NEFT transfers have now been divided into half-hourly batches with the settlement of the first batch starting after 12:30 am (after midnight) and the last batch ending at midnight. This NEFT timing cycle will function round-the-clock.
Since the settlement of the last NEFT payment batch ends at midnight, you might not be able to make a transaction after 11:30 pm till the beginning of the next batch at 12:30 am the next day.
The RBI has decided to make NEFT money transfer facility available not just for 24 hours a day but also on all days of the year, including holidays. So far, NEFT facility was not available on banking holidays and people had to wait for the bank branches to open even for online money transfers.
RBI’s move will promote digital transactions in India. So far, IMPS facility allowed 24x7 fund transfers online but it had a limit of Rs2 lakh.
NEFT transactions done after banking hours will be automated using ‘Straight Through Processing (STP)’ modes by the banks. The existing rule of crediting the beneficiary’s account or returning the transaction (within 2 hours of settlement of the respective batch) to originating bank will continue, RBI said. Banks are supposed to send confirmation messages for all NEFT credits.
The RBI has asked banks to ensure availability of all necessary infrastructural requirements at their end for providing seamless NEFT 24x7 facility to their customers.
Most banks like the State Bank of India (SBI), ICICI Bank and HDFC Bank do not charge anything for online NEFT transfers. In July, the RBI had waived all charges on fund transfer through NEFT and RTGS and had also asked banks to pass on the benefits to customers. The RBI has also proposed to mandate banks to make all online NEFT transactions free for savings bank account customers from January 2020.
There is no minimum limit for NEFT transfer but it is generally used for fund transfers of up to Rs2 lakh. For high-value transactions, RTGS is used. The maximum NEFT limits vary from bank to bank and also depend on the customer category.
SBI has a Rs10 lakh limit for retail customers while ICICI Bank allows NEFT transfers up to Rs10 lakh for most customers but for others, it may allow NEFT transactions up to Rs25 lakh. HDFC Bank, too, has a Rs25 lakh limit for online NEFT transactions.