An amount to up to Rs 2 lakh can now be transferred through banks free of cost. The Reserve Bank of India has raised the threshold limit for real time gross settlement (RTGS) transactions from Rs 1 lakh to Rs 2 lakh and introduced a new value band for National Electronic Fund Transfer (NEFT) in order to promote electronic transactions amongst customers.
According to the revised rates, banks can levy Rs 25 as service charge for transactions from Rs 2 lakh to Rs 5 lakh and a service charge of Rs 50 can be charged for transactions exceeding Rs 5 lakh. Currently, banks could levy Rs 25 service charge on RTGS transactions above Rs 1 lakh.
The RBI has also introduced a new value band for NEFT transactions. The service charge on transactions of Rs 1 lakh to Rs 2 lakh will only be Rs 15 as against Rs 25 at present. The changes will be applicable from November 15.Online GST Certification Course by TaxGuru & MSME- Click here to Join
This has been done to encourage more customers to avail themselves of the NEFT facility. According to the central bank, as of end-July 2010, close to 70,000 branches of 98 banks had participated in the NEFT system.
The volume of transactions on the NEFT system reached around 9.83 million in September 2010 and in value terms Rs 61,620 crore has been transferred.
The transactions on the RTGS system though continue to be much higher. The value of transactions on the RTGS system in September 2010 stood at Rs 41 lakh crore.
A Working Group comprising of representatives from the RBI and select commercial banks including State Bank of India, Punjab National Bank, ICICI Bank and HDFC Bank has submitted its report for the implementation of the next generation RTGS system.
The roll out of the next generation system has started and will take two years for completion.