Uniformity in penal interest payable by banks for delays in credit / return of NEFT / NECS / ECS transactions
As a customer friendly feature and to improve ePayments in India, Reserve Bank of India, DPSS, has issued a Notification on Uniformity in penal interest payable by banks for delays in
credit / return of NEFT / NECS / ECS transactions.
credit / return of NEFT / NECS / ECS transactions.
The Notification No. is RBI/2010-11/188 DPSS (CO) EPPD No. 477/ 04.03.01 / 2010-11, dt. September 1, 2010.
This Notification can be accessed @
Why was this Notification required:-
01) In terms of the NEFT / NECS / ECS Procedural Guidelines as also the relevant circulars / instructions issued by Reserve Bank of India, from time to time, member banks need to afford credits to beneficiary accounts or return transactions (uncredited for whatever reason) to the originating / sponsor bank within the prescribed timeline. Any delays in doing so attract penal provisions specified therein.
03) The spike in the NEFT/ECS transactions is an encouraging feature.
The Highlights of the Notification are: _
01) Uniformity has been brought in with respect to the penal interest payable for delayed credits/returns across Electronic Retail Products.
02) The new rate at which the Banks have to pay the penal interest is RBI LAF Repo Rate plus two percent.
03) The penal interest should be credited to the customer’s account, without any specific request from the customer. THIS IS THE BEST PART.
04) NEFT Origination Banks have been advised to ensure that the NEFT Outward transactions are executed in the next available batch. This is for both across the counter as well as online requests.
05) In case of likelihood of delays, the customers should be informed of the same.
06) The changes are applicable with immediate effect.
The implications are:-
01) This will encourage Banks to strengthen their ePayments infrastructure, not only the IT part, but also the points-of-delivery.
02) This will encourage customers to move majority of their payments from the paper mode to electronic mode.
1 comment:
really good analysis..thanks
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