With the aim to promote digital transactions, the Reserve Bank of India (RBI) has decided to allow round-the-clock fund transfers through the National Electronic Funds Transfer or NEFT from December 2019.
RBI says the decision is likely to revolutionize the retail payments system of the country.
At present, the National Electronic Funds Transfer operated by the Reserve Bank of India as a retail payment system is available for consumers from a particular time i.e. 8 am - 7 pm on all working days with the exception of 2nd and 4th Saturdays of a month.
What is NEFT?
It is important to mention that the NEFT system is used for transfers of money up to Rs 2 lakh. It is a very easy and convenient way to transfer money from one place to another or one person to another.
In its Payment System Vision 2021 document, the Central Bank stated that it will make available the National Electronic Funds Transfer system on a 24x7 basis from December this year – for the convenience of people. The move will also help in promoting digital transactions.
Previously in its June policy, the Reserve Bank of India had done away with charges on fund transfers via RTGS & NEFT routes to increase digital transactions. It had asked all the banks to pass on the benefits to the customers.
What is RTGS?
The Real Time Gross Settlement System or RTGS is basically for large-value instant fund transfers.
In addition, a committee is already been set up that involves all stakeholders, under the chairmanship of the Chief Executive Officer (CEO) of Indian Banks' Association (IBA), to check the entire gamut of ATM charges & fees.
Currently, a number of people use NEFT as well as RTGS facilities for fund transfers and it is expected that from December onwards, many more people will be using it.
