Online money transfer to become faster, costlier

In a circular to the chiefs of all the member-banks providing the National Electronic Fund Transfer (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 the 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.

The 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.

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. Thereafter, a charge would be required to be paid to RBI by banks.

The sum total

* RBI asks banks to extend operating hours

*Banks told to adopt hourly settlements instead of the current practice

*Banks allowed to charge nominal levy upon customers for the service

*More than 60 lakh electronic fund transfers take place every month