NEFT & RTGS: Many Banks Defy RBI and Continue to Levy Charges for Money Transfer
Moneylife Digital Team 02 August 2019
Updated on 8 August 2019 at 4.37pm to include response from ICICI Bank.
 
In June, the Reserve Bank of India (RBI) directed banks not to levy any charges for transactions processed in the real time gross settlement system (RTGS) and national electronic funds transfer (NEFT) systems in order to encourage electronic transactions. Following this direction, banks were expected to stop charging customers for NEFT and RTGS from 1 July 2019. However, except State Bank of India (SBI), and few private sector banks, many banks continue to charge customers for NEFT and RTGS transactions under the pretext of other costs.  
 
Angry customers are venting their anger on social media against banks that are defying RBI direction. 
 
 
 
The RBI, in an order issued on 11 June 2019 had said, "In order to provide an impetus to digital funds movement, it has been decided that with effect from 1 July 2019, processing charges and time varying charges levied on banks by 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. The banks are advised to pass on the benefits to their customers for undertaking transactions using the RTGS and NEFT systems with effect from 1 July 2019."
 
 
However, this circular is about waiving charges levied by RBI on banks for NEFT and RTGS transactions; does this mean that banks can levy their own charges under the pretext of administrative and fixed costs, network charges, and cost for human resources? NEFT is used for transferring money of up to Rs2 lakh, while RTGS is used for transactions of Rs2 lakh and above.
 
Bank of Baroda charges Rs2.25 for NEFT of up to Rs10,000, Rs4.75 for transaction between Rs10001 to Rs1 lakh, Rs14.75 for Rs1 lakh and Rs2 lakh and Rs24.75 for money transfer of over Rs2 lakh. 
 
 
For NEFT outward transaction, ICICI Bank too levies Rs2.25 for up to Rs10000, Rs5 for transactions of Rs10001 to Rs1 lakh, Rs15 for transactions above Rs1 lakh to Rs2 lakh and Rs25 for each transaction above Rs2 lakh. For RTGS, ICICI Bank charges Rs25 for transactions between Rs2 lakh to Rs5 lakh and Rs50 for transaction above Rs5 lakh. 
 
 
For its easy access savings account, Axis Bank does not levy any charges for NEFT and RTGS transaction. It however, charges Rs2.50 to Rs15 per transaction on money transfer through IMPS. 
 
 
According to Twitterati, lenders such as Bank of Baroda, Indian Bank, Karnataka Bank, Union Bank of India, Canara Bank, Dena Bank, and ICICI Bank, among others are still charging for NEFT and RTGS transactions. 
 
 
 
 
 
 
 
Moneylife sent an email to RBI on banks not passing on the benefits charge waiver for NEFT and RTGS transactions. We will update this article as and when we receive response from the central bank.
 
Update:
After publishing this article, ICICI Bank has updated its website. In an email on 7 August 2019, an executive from ICICI Bank's PR agency says, the bank levies charges on NEFT and RTGS transaction that are initiated at branch level (offline). For online transactions, including net-banking and mobile apps, there are no transactions charges levied by ICICI Bank for both NEFT and RTGS. 
Comments
Rakesh Modi
6 years ago
Like other Govt. bodies where corruption is rampant, & they dont work without bribing them, seems like RBI is also one of them. I have a very bad experience when my hard earned money got stucked in Kapol bank's FD, for which I made numerous complaints to RBI but they are not bothered to reply also, nor picks phones. So now seems everything has to put up with Finance minister, PM or President only??
DeepakSB
6 years ago
RBI is like a LION without TEETH.

Can someone clarify on what power RBI has got over all the banks for such issue ?

IS RBI itself a caged joker in the hands of government , corrupt politicians and CROOKED industralists?

ONLY COMMON CITIZENS/HONEST TAXPAYERS ARE SUFFERERS !!!!

SHOULD A COMMON CITIZEN IGNORE ALL WARNINGS PUBLISHED BY RBI IN CONNECTION WITH BANKS ???
K V RAO
Replied to DeepakSB comment 6 years ago
What Deepak said is 100% correct. RBI's toothless phenomenon is well known but so called intellectuals who are aware of this become head losing their whatever left over reputation. To add further stuff, RBI was not consulted when 14/7 banks were nationalised in June/April 1969/1980. During UPA times, the Finance Ministry issued directives on retail lending. Further all top appointments have been made by the FM ignoring merit/eligibility. No wonder, banks plight is well known and Indians have become mute spectators.
K V RAO
6 years ago
What about transfer under IMPS? Will anybody clarify?
VIDYA JAGANNATHAN
6 years ago
IDBI Bank continue to charge for NEFT whereas SBI, TMB, IDFC did not charge any fee for NEFT
kiran
6 years ago
Bank of Baroda continues to charge nonchalantly and in utter defiance of the RBI orders. It can beat any private bank in ignoring the regulator orders.
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