RBI allows NEFT 24 x7 from today
Source: IT News
Imphal, December 16 2019:
With a view to facilitate smooth settlement of National Electronic Funds Transfer (NEFT) system, RBI has decided to permit NEFT transactions in the accounts of the member banks maintained by it, on 24 x 7 basis from today.
Till now NEFT was available only between 8 am and 7:45 pm on working days.
Besides NEFT did not work on 2nd and 4th Saturday of the week.
"In order to facilitate smooth settlement of these transactions, RBI has decided to extend the collateralised liquidity support (LS), round the clock, the RBI circular dated 13 December 2019 stated.
The decision to allow NEFT transactions on 24 x7 was taken in the Monetary Policy Meet of RBI held in August 2019 .
LS facility will operate as per the same terms and conditions as the Intra-Day Liquidity (IDL) facility, all member banks eligible for the IDL facility will be eligible to avail of the LS facility, the limit for LS facility would be set by RBI from time to time.
Drawings under the LS facility shall be reckoned as part of the eligible IDL limit, the margin requirement on LS facility would be similar to that of IDL facility, outstanding drawing at the end of the day under the LS facility will be automatically converted into borrowing under the Marginal Standing Facility (MSF), the MSF borrowing reversal will take place along with other (Liquidity Adjustment Facility (LAF) operations as is currently being done, the instructions on intra-day-liquidity and reversal of IDL shall continue, as hitherto and RBI may review the facilities based on the experience gained in operationalizing the scheme.
RBI has advised its member banks that: 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.
the system will be available on all days of the year, including 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, member banks will ensure sending of positive confirmation message (N10) for all NEFT credits and 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 RBI at all times to facilitate successful posting of NEFT batch settlements.
They have also been 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.
"This move (by RBI) is a step towards reducing the number of cheques while making payments.
Reducing cheque-based payments also increases a business' efficiency.
Earlier, RBI had removed NEFT and RTGS (Real Time Gross Settlement System) charges, making such transactions cheaper.
This will certainly promote digital payments for business users," RBI official said.
RBI has already included other categories of recurring payments through the Bharat Bill Payment System (BBPS) that enables a customer to pay several bills such as telephone, water, gas, direct-to-home (DTH) and electricity at a single location�electronic or physical.
BBPS payments can be made using cash, cheques as well as through any digital mode of payment such as internet banking, debit, credit card among others.
Bill aggregators and banks function as operating units and carry out these payment transactions for customers.
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