National Electronic Fund Transfer will now be 24x7, all 365 days a year
A small change in the Payment & Settlement systems by RBI, it is a giant leap for making our life more digital. We do not live our life between 8 to 7; and on working days only. Do we?
From next Monday—16 December 2019—National Electronic Fund Transfer (NEF) services will be available 24x7, all 365 days a year, according to an RBI circular. Now, NEFT transfer facility is not available between 7 pm in the evening and 8 am in the morning. Also, it was not available on Sundays and other bank holidays.
NEFT transactions after usual banking hours of banks are expected to be automated transactions initiated using ‘Straight Through Processing (STP)’ modes by the banks.. The existing discipline for crediting beneficiary’s account or returning the transaction (within 2 hours of settlement of the respective batch) to originating bank will continue, clarifies RBIm in its circular.
All provisions of NEFT procedural guidelines will be applicable for NEFT 24x7 transactions as well. RBI has asked member banks to keep adequate liquidity in their current account with Reserve Bank of India at all times to facilitate successful posting of NEFT batch settlements.
While such transfer is available today with the Immediate Payment Service (IMPS), there is a limit of INR 2 lakh per day to such transactions. NEFT has no such limit, though there is a per transaction limit of INR 10 lakhs. Also, IMPS require the user to register the mobile number with the bank account.
It is not likely to impact other payment systems so much because they are confined to smaller payments, which will not be too impacted by this decision.