Update : Digital Transactions in India

India’s largest bank, the State Bank of India, has waived the NEFT and RTGS transactions on the payments carried on the internet and mobile banking from July 1. This comes on the heels of an earlier Reserve Bank of India order to do away these charges to promote a cash less-cash economy in the country.

Starting August 1, the bank has also decided to do away with the IMPS (Immediate Payment Service) charges charged on transactions done through mobile phones.

What is the RTGS and the NEFT?

The Real-Time Gross Settlement (RTGS) system is used for large-value transactions which are processed instantaneously. The National Electronic Funds Transfer (NEFT) system is used for fund transactions of up to ?2 lakh by the banks.

Future steps

As per the RBI’s vision document for 2021, the central bank has stated that it would consider a shift from the transaction value-based pricing slabs to a fixed minimum transaction-based pricing. This will be mainly focused on the recovery of marginal costs and to migrate to a low margin-high volume regime.

However, as per some industry players, the budget proposal may aid them in expanding operations rapidly and help banks get more current accounts.