6-Dec-2019: Availability of National Electronic Funds Transfer (NEFT) System on 24x7 basis

It has been decided that the NEFT facility shall be made available from December 16, 2019 with the first settlement taking place after 00:30 hours on December 16, 2019 (i.e. night of December 15, 2019).

Member banks are advised to note the following:

1. There will be 48 half-hourly batches every day. The settlement of first batch will commence after 00:30 hours and the last batch will end at 00:00 hours.
2. The system will be available on all days of the year, including holidays.
3. NEFT transactions after usual banking hours of banks are expected to be automated transactions initiated using ‘Straight Through Processing (STP)’ modes by the banks.
4. 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.
5. Member banks will ensure sending of positive confirmation message (N10) for all NEFT credits.
6. All provisions of NEFT procedural guidelines will be applicable for NEFT 24x7 transactions as well.

Member banks are expected to keep adequate liquidity in their current account with Reserve Bank of India at all times to facilitate successful posting of NEFT batch settlements.

Member banks are also advised to initiate necessary action and ensure availability of all necessary infrastructural requirements at their end for providing seamless NEFT 24x7 facility to their customers. Banks may disseminate information on the extended timings for NEFT to all their customers.

16-May-2019: Reserve Bank proposes 24×7 NEFT money transfer

The Reserve Bank of India (RBI) has proposed to examine the possibility of extending availability of National Electronic Funds Transfer (NEFT) round-the-clock on all the seven days of the week — 24×7 basis — to facilitate beyond the banking hour fund transfer.

Need to add more features to NEFT (faster settlements, staggered payments) will also be examined. The central bank will also examine the possibility to extend the timings for customer transactions in RTGS (Real Time Gross Settlement) based on industry preparedness and customer demand. Currently, NEFT is not allowed on Sundays, second and fourth Saturday of the month and the declared bank holidays for the calendar year. SBI offers NEFT from 8 am to 7 pm on Monday to Friday and from 8 am to 1 pm on Saturday.

Though money can be transferred through Immediate Payment Service (IMPS) round the clock, the maximum amount allowed is Rs 2 lakh. The RTGS window — used for transfer of big amounts — for customer transactions is available to banks from 8 am to 4.30 pm on a working day, for settlement at the RBI end.

It said the RBI would examine the need to consider uninterrupted and round-the-clock availability of various payment systems, gradual enhancement of limits, including differential day-night, holiday limits for transactions, subject to risk management and liquidity management.

As of now, banks are required to have different settlement accounts for settling card transactions with different card networks. To bring in more efficiency in the system and making the process more graceful, the Reserve Bank will examine the feasibility of having a single national settlement account for all authorised card networks in consultation with the stakeholders.

Though mobile internet speed has risen, connectivity issues remain unresolved in large areas. Therefore, providing an option of offline payments through mobile devices for furthering the adoption of digital payments shall be a focus area during this vision period. The RBI document says the Reserve Bank will require service providers to bring about transparency in pricing. The RBI would consider a review of its instructions on customer charge for its payment systems and shift from transaction value-based pricing slabs to a fixed minimum transaction-based pricing. The approach to pricing should be towards recovery of marginal costs and to migrate to a low margin-high volume regime.

Given the current growth trend, it is expected to have 5 million active PoS (point of sale terminals) by end 2021. Digital PoS (QR code) is also expected to increase substantially and the total card acceptance infrastructure will be upscaled to six times from the present levels by end 2021. This is expected to support aim of cash-lite economy and also shift Cash on Delivery (CoD) transactions to digital modes for e-commerce. While no specific target is considered for cash in circulation, the enhanced availability of PoS infrastructure is expected to reduce demand for cash and thus over time achieve reduction in Cash in Circulation (CIC) as a percentage of GDP.

According to the RBI, usage of debit cards at PoS transactions is expected to be at least 44 per cent of total debit card transactions (at PoS and ATM). In value terms, it is 15.2 per cent in 2018-19 (5.2 per cent in 2014-15) which is expected to be 22 per cent by end 2021. It also envisions increased deployment of card acceptance infrastructure across the country including at smaller centres with a substantial portion of the infrastructure taking care of processing contactless card payments.

According to the RBI, Payment Systems Vision 2021 has been formalised based on inputs from various stakeholders and guidance of the Board for Payment and Settlement Systems (BPSS). It envisages to achieve a ‘highly digital’ and ‘cash-lite’ society through the goal posts of competition, cost effectiveness, convenience and confidence (4Cs).

With concerted efforts and involvement of all stake holders, the Payment Systems Vision 2021, with its 36 specific action points and 12 specific outcomes, aspires to enhance customer experience. The RBI will implement the approach outlined in this vision during the period 2019–2021. The previous vision document covered the period 2016-2018.

The central bank will also examine the possibility to extend the timings for customer transactions in RTGS (Real Time Gross Settlement). Though money can be transferred through Immediate Payment Service (IMPS) round the clock, the maximum allowed is Rs 2 lakh.

17-May-2019: Nilekani-led panel on digital payments submits report to RBI

A Reserve Bank-appointed committee headed by Aadhaar architect Nandan Nilekani submitted its suggestions on promoting digital payments to Governor Shaktikanta Das.

In January, the Reserve Bank of India had set up the five-member panel on deepening digital payments with a view to encouraging digitisation of payments and enhance financial inclusion through digitisation. The committee held its deliberations including consultations with various stakeholders and submitted its report.

The Reserve Bank of India will examine the recommendations of the committee and will dovetail the action points, wherever necessary, in its Payment Systems Vision 2021 for implementation.

The panel was tasked with reviewing the existing status of digitisation of payments in the country, identifying the current gaps in the ecosystem and suggesting ways to bridge them and assessing the current levels of digital payments in financial inclusion.

It was also asked to undertake cross country analyses with a view to identify best practices that can be adopted in our country to accelerate digitisation of the economy and financial inclusion through greater use of digital payments.

Earlier this week, the RBI released a vision document for ensuring a safe, secure, convenient, quick and affordable e-payment system with an aim making India a 'cash-lite' society.

The 'Payment and Settlement Systems in India: Vision 2019 - 2021', with its core theme of 'Empowering Exceptional (E)payment Experience', envisages to achieve "a highly digital and cash-lite society" through the goal posts of competition, cost effectiveness, convenience and confidence (4Cs).