Finance Ministry for zero charges on e-transfer of funds up to Rs1 lakh

In order to promote cashless transactions, the Finance Ministry has asked all nationalised banks to cut fees to zero for electronic transfer of fund of up to Rs1 lakh from Rs5 per transfer

 
New Delhi: To promote cashless transactions, the Finance Ministry has asked public sector banks to take steps to reduce the fee to zero for electronic transfer of funds up to Rs1 lakh, reports PTI.
 
Currently, most banks charge a maximum fee of Rs5 per transfer of funds up to Rs1 lakh from one account to another through National Electronic Funds Transfer (NEFT) system.
 
Transfer of funds up to Rs10,000 through NEFT system attract a maximum charge of Rs2.50 per transaction.
 
In a recent communication to the state-owned banks, the Ministry had asked them to "take action" to reduce the NEFT charges to zero for value up to Rs1 lakh.
 
However, some banks are yet to intimate the Ministry about the action taken by them to reduce the charges, sources said.
 
Reserve Bank of India (RBI) has, however, retained maximum charges of Rs15 per transaction for electronic transfer of funds beyond Rs1 lakh to less than Rs2 lakh. 
 
The government has been asking banks to encourage transactions through e-payment channels so as to reduce the number of transactions through cheques and other expensive modes of transactions.
 
The public sector banks have also been asked to identify top 20% branches in respect of business volumes to bring down the number of cheque based transactions by at least one-fifth in the current financial year.
 
The banks have also been asked to ensure that all payments and disbursements by them, except sundry payments, are made only electronically.
 
The RBI had recently said that it is "desirable" that the benefits accruing on account of increasing volume of transactions are passed on to the customers so as to incentivise greater use of the electronic payment system.
 

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COMMENTS

Apoorva Raval

6 years ago

Here Ministry is talking about zero fee on NEFT, but do they know Foreign Pvt Bank are charging full fee in spit of AQB of 25000, it full fledge cheating my Foregin Bank like Standard Chartered who charge 5 rs for NEFT upto 1 lac but provide unlimited check book, I don't understand what they want to encourage.. Net Banking or Branch banking which is more.. expensive for bank and customer..

Some time this so called foreign bank behave senseless.

Indian banks appears insulated from financial crisis: IMF

According to International Monetary Fund, countries like Australia, Canada, India, and Malaysia have a relatively low degree of exposure to international banking and also avoided the worst of the effects of the global financial crisis

 
Washington: India seems insulated from the worst of effects of global financial crisis as it has relatively low degree of exposure to international banking, International Monetary Fund (IMF) has said, reports PTI.
 
"India and Malaysia appear insulated from foreign banks by almost all indicators when compared with all peer groups, except developing Asia and the economies that make up the BRIC group," said the report released on Tuesday in which IMF asked if some banking systems withstand international contagion because they are less globally integrated.
 
"Australia, Canada, India, and Malaysia have a relatively low degree of exposure to international banking and also avoided the worst of the effects of the global financial crisis," the report said.
 
Both India and Malaysia have low foreign bank presence, and banks there have a very low level of foreign assets in their balance sheet, it said.
 
Malaysia had relatively low reliance on foreign liabilities compared with other peers, whereas in 2007 India was close to the BRIC (Brazil, Russia, India, China) average, the report said.
 
Observing that the recent episode of global financial turmoil highlights the risk of international contagion and the potential resiliency of less integrated banking systems, the report explore the banking system "openness" and regulatory frameworks of four jurisdictions generally regarded as less globally integrated, all of which fared relatively well in the financial crisis.
 
It concludes that the funding structure of banks could be more important than lack of foreign bank ownership for financial stability.
 
According to a table mentioned in the IMF report, India has less than 10% globalisation of its banking system.
 
India and Malaysia explicitly restrict entry by foreign banks, although both economies have relaxed the policy somewhat, it said.
 
IMF report said the number of branches a subsidiary can set up had been restricted.
 
"The maximum foreign ownership stake in a domestic bank is 30%. In India, foreign bank entry has been through branches, and the number of approvals (including expansion of branch networks) is strictly controlled," it said.
 
"Foreign banks that already have operations in India are not permitted to own more than 5% of shares in domestic banks.
 
Other foreign banks must seek approval to own more than 10% of shares in an Indian bank.
 
The authorities are currently considering encouraging the use of subsidiaries. The share of foreign-owned bank assets in total assets is subject to a ceiling," the report said.
 

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COMMENTS

Nilesh KAMERKAR

6 years ago

IMF would have had similar opinion / forecasts about the American and European Banks too.

Bank ATMs stop sucking-in cash after RBI direction

RBI has asked all banks to disable cash retraction facility at all their ATMs, however customers will have to be extra careful in collecting money dispensed by the ATM, as they cannot later claim it from the bank


New Delhi: Next time you go to an automated teller machine (ATM) to withdraw cash, don't worry about the banknotes getting sucked back by the machine if not collected...

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