Discretion to customers for selection between RTGS and NEFT – Is it required?
This was waiting to happen. RTGS and NEFT have similar objectives; though a close observations of the same, show that both are different.
Apart from the charges, RTGS is Gross Settlement, whereas NEFT is Batch Settlement. I am sure, by now the Bank customers are familiar with the basic differences between RTGS and NEFT.
As the end goal of RTGS and NEFT was the same i.e movement of funds from one Bank Account to another Bank Account, the customer was not provided the choice to choose between RTGS and NEFT.
Majority of the times, the discretion was with the Bank, either to route it through RTGS or NEFT. This is more so, in case of Internet/Mobile Banking.
To enable the customer to decide the mode of funds transfer between RTGS and NEFT, RBI today released a Notification, stating that the customer should have the option to choose between RTGS and NEFT, at the time of initiation of the funds transfer.
The RBI Notification No is: RBI/2011-12/152 DPSS (CO) EPPD No./274/04.03.01/2011-12 dt. August 12, 2011
The RBI notification can be accessed @
The Banks participating in RTGS/NEFT have been requested to ensure compliance as per the above notification.
There will be a huge impact for the Banks, as the IT infrastructure has to be suitably modified.
The IT Application’s have to be mainly modified in the area of Internet/Mobile Banking arena.
There will be minimal impact on transactions routed through the Branch Desk, as the Desk Officer, can initiate the funds transfer as per customer request.
Only in case of automated transactions, appropriate modification in the IT Application will be required.
In the long run, such discretion will aid in increasing the flow of transactions to RTGS/NEFT
