How free NEFT and RTGS will impact you, economy - 5 points
Come July 1, 2019, RTGS and NEFT transactions would become free!
Come July 1, 2019, RTGS and NEFT transactions would become free! In a recent notification, the RBI said, "In order to provide an impetus to digital funds movement, it has been decided that with effect from July 1, 2019, processing charges and time-varying charges levied on banks by Reserve Bank of India (RBI) for outward transactions undertaken using the RTGS system, as also the processing charges levied by RBI for transactions processed in NEFT system will be waived by the Reserve Bank." Here's how the RBI decision will impact you, economy:
1. As of date, you have to pay charges for sending money through National Electronic Funds Transfer (NEFT) and Real Time Gross Settlement System (RTGS). The RBI decision is set to boost digital transactions and benefit a large number of bank customers, who have so far not been much enthusiastic towards digital transactions.
2. Over the years, NEFT and RTGS have developed into strong platforms, simplifying money transfer. But now, they will likely become more popular and help you save the transaction cost.
3. Till now, salary account holders and customers of private banks have been mostly using the NEFT and RTGS platforms. Doing RTGS or NEFT through salary account has been free for long. Even the private banks had waived off NEFT/RTGS charges long back. The latest RBI directive, hence, will now benefit all bank customers - be it private or public. It is expected that small traders, for whom every single rupee count, would now find the RTGS/NEFT platforms beneficial.
4. The RBI's digital push will certainly bring down the amount of money transfer through traditional means like cash, demand drafts or cheques.
5. The RBI decision will likely help realise the digital payments boom expected over the next few years. According to an ASSOCHAM-PWC India study, India's digital payments transaction value is projected to more than double to USD 135.2 billion in 2023 from USD 64.8 billion this year.