The Reserve Bank of India (RBI) has capped fees charged by banks for electronic payment (e-payment) and collection of outstation cheques. The move is aimed at popularising electronic payments and discouraging higher charges levied by banks on customers.

In the operational guidelines issued on Wednesday, RBI has advised banks to make inward electronic transactions — Real-Time Gross Settlement (RTGS), National Electronic Fund Transfer( NEFT) and Electronic Clearing System (ECS) – free of cost.

RTGS is a fund transfer mechanism, where transfer of money takes place from one bank to another on a “real time” and on a “gross” basis. Real time means the payment transaction is not subjected to any waiting period.

NEFT is a nation-wide fund transfer system to facilitate transfer of funds from any bank branch to any other branch. As on July 20, 2008, 46,363 branches of 87 banks have been participating in the system.

Steps are being taken to widen the coverage, both in terms of banks and branches. ECS is an electronic fund transfer, mainly done by institutions for bulk payments like dividend, salary and pension.


Transaction                     Amount(in Rs)                                            Charges  (in Rs per transaction)

RTGS*                                1-5 lakh                                                                                   Rs.   25

5 lakh and above                                                           not exceeding Rs 50


NEFT*                                Up to 1 lakh                                                                      not exceeding Rs 5

1 lakh and above                                                         not exceeding Rs 25

Outstation cheque           collection Up to 10,000                                                not exceeding Rs 50
10,000- 1 lakh                                                               not exceeding Rs 100

1,00,001 and above                                                     not exceeding Rs 150

*These charges shall be applicable for all types of transactions, including inter-bank funds transfers

According to bankers involved in electronic payments, currently there are no standard charges and the move by RBI may have been triggered by the observation that most banks charge higher fees to discourage electronic payments.

“By discouraging electronic payments, banks get to manage cash transactions, which enable them to use the float money (money left with the bank from the time when funds are sent and they finally reach the destination).

For outward electronic payments, transactions have been divided into two slabs — Rs 1 to 5 lakh and Rs 5 lakh and above. RBI has further stated that a bank can charge a maximum fee not exceeding the cheque return charges for ECS debit returns. In other words, maximum charges can be the amount charged when cheques are dishonoured.

For collection of outstation cheques, RBI has clarified that the prescribed charges are inclusive of all charges and there will be no additional fees on account of courier costs and out-of-pocket expenses.

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