New delhi, February 22: Online transfer of funds from bank accounts may soon become faster, but this could lead to higher charges for customers, as banks may have to pay the Reserve Bank a fee for this service from April1.
The National Electronic Fund Transfer (NEFT), which allows bank customers to transfer funds electronically, has been a highly successful service ever since it was launched in late 2005. More than 60 lakh transactions are estimated to be taking place every month through this route.
In a circular to the chiefs of all the member-banks providing NEFT service, the RBI has asked the banks to take necessary measures to “strengthen the NEFT system in terms of availability, convenience, efficiency and speed” with effect from March 1.
Among these measures, the apex bank has asked banks to extend the operating hours of NEFT system from 9 am to 7 pm on weekdays and from 9 am to 1 pm on Saturdays. Currently, NEFT is available from 9 am to 5 pm on weekdays and from 9 am to 12 noon on Saturdays.
The central bank has also asked banks to move to hourly settlement of NEFT transactions, as against current practice of six batches of settlements on weekdays and three on Saturdays.
However, the extension of timing and faster settlements could coincide with higher charges for such transactions.
Currently, banks do not need to pay any processing or service charges to RBI for electronic fund transfer, but the waiver of this fee is valid till March 31, only. Thereafter, a charge would be required to be paid to RBI by banks, which in turn would pass on the same to the customers.
In the absence of any charges to be paid to RBI, banks are allowed to levy a nominal fee of up to Rs 5 per transaction for outward transactions up to Rs 1 lakh and of up to Rs 25 for outward transactions of Rs 1 lakh and above. There are currently no charges for inward transactions under the NEFT.
While many banks have been charging their customers for outward NEFT transactions from the very beginning, some of them, including the country’s second largest private sector bank HDFC Bank, were providing this service for free till some time ago.
In a recent circular to its customers, HDFC Bank said it would charge Rs 5 per transaction for NEFT transactions up to Rs 1 lakh and Rs 25 for above Rs 1 lakh.
Similar fees are charged by other banks such as ICICI Bank, SBI and many others.
According to industry experts, the current charges are quite nominal and banks have been levying the same to recover their own costs. However, the charges are set to go up once banks start paying any processing or service charge to RBI for NEFT system, they added.
Banks together handled transactions worth over Rs 32,000 crore in January itlself under the NEFT system, but are estimated to have collected a cumulative fee of about Rs 10 crore only for the same.
—-Agencies