Online money transfer (NEFT) to become faster and costlier also

The RBI headquarters in Mumbai

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In a circular to the chiefs of all the member-banks providing NEFT service(The National Electronic Fund Transfer (NEFT), which allows bank customers to transfer funds electronically), 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 1 March.

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 31 March 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.

It is not known how the banks already charging would react to this news.

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