RBI Doubles Online Money Transfer Limit via RTGS to Rs 2 Lakh

The Reserve Bank has doubled the threshold limit for electronic fund transfers using the Real Time Gross Settlement (RTGS) system to Rs 2 lakh with effect from November 15.

"It has been decided to increase the threshold limit for RTGS transactions from the present limit of Rs 1 lakh to Rs 2 lakh," the RBI said in a notification.

The RTGS system facilitates high-value transfers of money from one bank to another on a real-time and gross basis.

The central bank said the RTGS system has witnessed tremendous growth in terms of both transaction volumes and values since inception in March, 2004.

"With the increased number of electronic payment transactions, it has become expedient to position the Indian RTGS system primarily for processing and settling large value payment orders," the RBI had said in its second quarter monetary policy review.

On an average, the central bank handles around 60,000 RTGS and around 50,00,000 cheque clearing transactions per day.

For electronic transactions valued between Rs 1-2 lakh, the RBI has created a new value band in its 'near real-time' National Electronic Fund Transfer (NEFT) system to cater to retail bank customers.

The RBI has revised the service charges for fund transfers through the NEFT mode. Fund transfers up to Rs 1 lakh will continue to attract a service charge of Rs 5.

"The revised threshold limits for customer transactions in RTGS system and revised NEFT service charges will be implemented with effect from November 15, 2010," the RBI said.

For fund transfers valued between above Rs 1 lakh and Rs 2 lakh, the RBI has revised the customer charges downward to Rs 15 from Rs 25 earlier. The fee for fund transfers worth more than Rs 2 lakh remains unchanged at Rs 25.

The NEFT has been a highly successful service ever since it was launched in late 2005. More than 60 lakh transactions are estimated to take place every month through this route.

The NEFT mode provides for a near real-time settlement finality, with 11 settlement cycles in a day.

Currently, banks pay processing or service charges to the RBI for electronic fund transfers, which are in turn passed on to customers. 

Economic Times, New Delhi, 04-11-2010