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RBI moves to make online bank transfer cheaper, to review ATM charges

Preeti Soni | Jun 6, 2019, 02.16PM IST

  • The Reserve Bank of India has removed the charges levied to process any online transaction through NEFT and RTGS system.
  • The Central Bank has also decided to set up a committee to review the charges for using the ATM machine.
The Reserve Bank of India (RBI) today paved the way for cheaper online fund transfers as it removed charges levied on NEFT and RTGS transactions. And, banks will be expected to make it cheaper for customers to perform these transactions too.

“In order to provide an impetus to digital funds movement, it has been decided to do away with the charges levied by the Reserve Bank for transactions processed in the RTGS and NEFT systems. Banks will be required, in turn, to pass these benefits to their customers. Instructions to banks in this regard will be issued within a week,” RBI said on Thursday.

The Reserve Bank levies minimum charges on banks for transactions routed through its RTGS and NEFT. Banks, in turn, levy charges on their customers.

The decision to scrap the fees levied on RTGS transaction comes days after RBI extended the timings for doing RTGS transaction. Currently, the fee for transferring funds using RTGS varies according to the time. There is no fee between 8 am to 11 am. The fee for transfer of funds during 11 am to 1 pm is ₹2 whereas from 1 pm to 6 pm is ₹5. The fee for transaction after 6 pm is ₹10.

Review ATM Charges

The Central Bank has also decided to set up a committee to review the charges for using the ATM machine. The committee will be chaired by Chief Executive Officer, Indian Banks’ Association (IBA), who will examine the entire issue related to ATM charges and fees.

“Usage of ATMs by the public has been growing significantly. There have, however, been persistent demands to change the ATM charges and fees,” the central bank said in a statement.

Earlier today, The Reserve Bank of India decided to reduce the repo rate for the commercial banks by 25 basis points (bps) to 5.75% in its second monetary policy review of the current fiscal.

The RBI changed its monetary policy stance from neutral to accommodative, ruling out the chances of a rate increase.

See also:
RBI surprises markets with a change in stance — aims to revive India's 'animal spirits'
RBI to extend RTGS deadline to 6 p.m. from June 1
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