Major Boost For Digital Payments: RBI Waives Off Transaction Charges On NEFT Payments From 1 January 2020

In a major boost for the booming digital and cashless payments ecosystem in India, the Reserve Bank of India (RBI) headed by Governor Shaktikanta Das decided to free the National Electronic Funds Transfer (NEFT) based digital cash transfers of any charges, reports India Today.

From 1 January 2020, both private and public sector banks operating in India will stop charging the account holders for cash transfer activity performed through NEFT. The decision was taken by the RBI on the third anniversary of the unprecedented demonetisation exercise.

The RBI underscored that from October 2018 to September 2019, digital payments accounted for a massive 96 per cent share of the total non-cash retail payments made. Of this impressive figure, Unified Payments Interface (UPI) contributed with 874 crore transactions, while NEFT contributed 252 crore transactions in toto.

The RBI also highlighted that an impressive rise of over 263 per cent and 20 per cent had been recorded for transactions made through UPI and NEFT over the period on a year on year basis.