No NEFT Charges On Savings Bank Accounts From Jan 2020

The Reserve Bank of India (RBI) on Friday issued various proposals to heighten the usage of digital transactions in India.

Among other things, in its press release dated 8 November, RBI has mandated banks "not to charge savings bank account customers for online transactions in the NEFT system with effect from January 2020".

The central bank said that digital payments constituted 96 percent of total non-cash retail payments during the period October 2018 to September 2019 and during the same period, the National Electronic Funds Transfer (NEFT) and Unified Payments Interface (UPI) systems handled 252 crore and 874 crore transactions with year on year growth of 20 percent and 263 percent, respectively.

Among options, other than free NEFT transactions, RBI proposed the following steps to further its cause to promote digital transactions:

• Operationalise the Acceptance Development Fund to increase acceptance infrastructure with effect from January 1, 2020.
• Constitute a Committee to assess the need for plurality of QR codes and merits of their co-existence or convergence from both systemic and consumer viewpoints.
• Permit all authorised payment systems and instruments (non-bank PPIs, cards and UPI) for linking with National Electronic Toll Collection (NETC) FASTags. Going forward, this will facilitate the use of FASTags for parking, fuel, etc., payments in an interoperable environment.
• Enable processing of e-mandates for transactions through UPI.

Earlier, RBI had also proposed making NEFT transactions available 24x7 from December 2019.