Days after the Reserve Bank of India (RBI) decided to waive all charges on fund transfers through RTGS and NEFT routes, the central bank on Tuesday asked the banks to put the measure into effect from 1 July, reported news agency ANI.

RBI had taken the decision last week which would allow digital transactions to get a boost and payments through other modes such as cash, demand draft and cheque may come down.

The Real Time Gross Settlement System (RTGS) is meant for large-value instantaneous fund transfers while the National Electronic Funds Transfer (NEFT) System is used for fund transfers up to Rs 2 lakh.

The country’s largest bank, SBI, charges between Re 1 and Rs 5 for transactions through NEFT and between Rs 5 and Rs 50 through the RTGS route.

In order to incentivise digital funds transactions , the central bank further said it has been decided that with effect from July 1, 2019, processing charges and time varying charges levied on banks by RBI for outward transactions through the RTGS, as also the processing charges for transactions processed in NEFT will be waived by the Reserve Bank.

“The banks are advised to pass on the benefits to their customers for undertaking transactions using the RTGS and NEFT systems with effect from July 1, 2019,” it said.

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

Meanwhile, the RBI has decided to set up a committee to review the entirety of charges imposed on the use of ATMs as their usage by the public has been growing significantly.

“There have, however, been persistent demands to change the ATM charges and fees,” the RBI noted.

The committee is expected to submit its recommendations within two months of its first meeting, RBI Governor Shaktikanta Das told reporters.

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