Mumbai (Maharashtra): The Reserve Bank of India (RBI) on Friday mandated banks not to charge savings account holders for National Electronic Funds Transfer (NEFT) from January 2020.
Digital payments constituted a high 96 per cent of total non-cash retail payments from October 2018 to September 2019. In this period, NEFT and Unified Payments Interface (UPI) systems handled 252 crore and 874 crore transactions with a year-on-year growth of 20 per cent and 263 per cent respectively.
"In pursuance of its vision to promote digital payments, RBI's endeavour has been to establish state-of-the-art payment systems that are efficient, convenient, safe, secure and affordable," it said in a statement. "The efforts have resulted in rapid growth in the retail digital payment systems."
The RBI said earlier that it had done away with charges on NEFT and Real-Time Gross Settlement (RTGS) transactions. RTGS is meant for large-value instantaneous fund transfers while the NEFT is used for transfers up to Rs 2 lakh.
The central bank also called for operationalising the Acceptance Development Fund to increase acceptance infrastructure with effect from January 1 next year. It said a committee must be constituted to assess the need for a plurality of quick response (QR) codes and merits of their co-existence or convergence from both systemic and consumer viewpoints.
The RBI proposed to 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 and fuel payments in an interoperable environment."
The benchmarking exercise undertaken by the RBI shows a high position enjoyed by the country in various parameters in the payment systems, it added.
"The RBI facilitated acceptance of RuPay cards in Bhutan. It will actively engage with the payment system regulators in other jurisdictions and share its experience to derive synergies and reduce the cost and time taken for inward remittances, especially in key remittance corridors."