24x7 fund transfers under NEFT from Dec 2019 to boost digital payments

With a view to boost digital payments, the Reserve Bank of India (RBI) will allow the National Electronic Funds Transfer (NEFT) payment system to operate on a 24x7 basis from December 2019. RBI Governor Shaktikanta Das said the move was expected to revolutionise the retail payments system of the country.

At present, the facility of NEFT — usually preferred for fund transfers of less than
Rs 2 lakh — is available between 8 am and 7 pm on all working days, except the second and fourth Saturdays of every month.
According to Mrutyunjay Mahapatra, managing director and chief executive of Syndicate Bank, the new process might require a standard operating procedure, which can be prescribed by the regulator, for seamless clearing and settlement of fund transfers among banks.
“Banks will need to tweak their back-end system. At present, they get a closure window between 11 pm and 4 am, for NEFT transactions. This process might involve a little higher operating cost,” said a senior banker, in-charge of digital banking in a public sector bank.
Last month, the RBI had scrapped the levy on online transactions such as NEFT and Real Time Gross Settlement (RTGS) to make fund transfers cheaper. Unlike RTGS, the NEFT process takes place in cycles, where transfers are done on a real-time basis. Read More

Article Source -> Business Standard