Finmin tells RRBs to use sponsor banks infrastructure to become NEFT-enabled

KOLKATA: The ministry of finance has directed regional rural banks to use sponsor banks IT architecture to become part of the National Electronic Funds Transfer (NEFT) system for offering one-to-one electronic payment facility to customers. RRBs have recieved a note from the government earlier this week to this end.

RRBs will have to open settlement accounts with sponsor banks for this purpose, an RRB chairman said.

Under NEFT, individuals, firms and corporates can electronically transfer funds from any bank branch to any individual, firm or corporate having an account with any other bank branch in the country participating in the scheme. All bank branches need to be NEFT-enabled for offering this service.

Earlier, the government had told RRBs to take the direct route for becoming NEFT-enabled. But, it proved to be difficult for weak RRBs to do it as many of them are not eligible to become the member of centralised payment system, a must for NEFT system.

Source: EconomicTimes