NEFT to be available 24x7 from December 2019: RBI

In a move that gives a big thrust to online fund transfers, the Reserve Bank of India (RBI) today announced that the National Electronic Funds Transfer (NEFT) systems would be available on a 24x7 basis from December 2019.

At present, the NEFT payment system operated by the Reserve Bank as a retail payment system is available to customers from 8am to 7pm on all working days of the week (except 2nd and 4th Saturdays, and all Sundays of the month).

The Chief digital officer of a private bank, requesting anonymity, said, “These days 70-80 per cent of the bank’s customer transactions are taking place digitally. So, this is a positive step from the central bank to boost digital banking transactions as mentioned in the Payment System Vision 2021 document.”

In June, during the second monetary policy meeting, the Reserve Bank of India (RBI) announced the removal of charges levied by the Central Bank for transactions processed in the Real Time Gross Settlement System (RTGS) and National Electronic Funds Transfer (NEFT) systems. It became effective from July 1.

However, there was a misconception among customers that, effective July 1, there will be no charges on RTGS and NEFT based money transfers online. It boils down to there being two major cost components. First is what the RBI used to charge banks for the online transfer facility and the second being banks' own costs while offering the option to customers. RBI had waived the first component. It is up to the banks to decide if they wish to remove or retain the second cost component.

More billers included in BPPS

The Bharat Bill Payment System (BBPS), an interoperable platform for repetitive bill payments, currently covers five segments currently covers five segments i.e. direct to home (DTH), electricity, gas, telecom and water bills. The RBI has been decided to permit all categories of billers (except prepaid recharges) who provide for recurring bill payments to participate in BBPS on a voluntary basis. This will include insurance premiums, subscription services (online video streaming and periodical magazines), school / university fees, municipal taxes, etc.

Apart from digitisation of cash-based bill payments, these segments would also benefit from the standardised bill payment experience for customers, centralised customer grievance redressal mechanism, prescribed customer convenience fee and the like. Further instructions will be issued by the end of September 2019.

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