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.
RTGS is mostly used for transactions above Rs 2 lakh. The RBI added it will facilitate the creation of a central payment fraud registry for tracking payment system frauds.
Participants will be provided access to this registry for near real-time fraud monitoring.
The aggregated fraud data will be published to disseminate information on emerging risks.
Further, all categories of billers (except prepaid recharges), who provide for recurring bill payments, will be permitted to participate in the Bharat Bill Payment System (BBPS), an interoperable platform for repetitive bill payments, on a voluntary basis, the RBI said.
At present, BBPS currently covers biller segments like direct-to-home, electricity, gas, telecom and water bills. The central bank said a detailed guideline in this regard will be issued by September-end.
“Apart from digitisation of cash-based bill payments, these segments will also benefit from the standardised bill payment experience for customers, centralised customer grievance redress mechanism, prescribed customer convenience fee and the like,” the RBI said.