RBI allows RRBs, cooperative banks to transfer funds online

To popularise electronic transfer of funds, the Reserve Bank today allowed regional rural banks (RRBs) and cooperative banks to participate in the centralised payment systems.

With this, all the banks can now transfer funds electronically through real time gross settlement system (RTGS) and national electronic funds transfer (NEFT).

At present, the centralised payment systems -- RTGS and NEFT can be accessed only by members that included public and private sector banks. As an exception, RRBs have been given access to the NEFT system through their sponsor banks.

"On a review, it has been decided to expand the sub- membership route to enable all licensed banks to participate in NEFT and RTGS systems," RBI said in a notification.

NEFT, an electronic transfer of funds system meant for retail customers while RTGS system facilitates high-value transfer of money with threshold limit of Rs 2 lakh.

This would be an alternate mechanism to all licensed banks which have the technological capabilities but are not participating in centralised payment systems on account of either not meeting the access criteria or because of cost considerations, it said.

Eliciting condition for such transactions, the notification said, the sub-member would participate in the centralised payment systems through their sponsor bank which is a direct member of the centralised payment system.

In order to ensure compliance with the timely credit and return discipline which are of utmost importance in centralised payment systems, branches of sub-member that are not under core banking system shall be kept out of the centralised payment systems till such time they are brought under core banking, it said.

The sponsor banks would be responsible for sending or receiving the transactions or messages on behalf of their sub-member, it added.

The charges, it said, for customer transactions of sub- member cannot exceed the charges applicable to customers of sponsor banks or direct members of the centralised payment systems.

Source: EconomicTimes