RBI's big decision, now authorized payment system providers will also provide RTGS, NEFT facility

RBI’s big decision, now authorized payment system providers will also provide RTGS, NEFT facility

In the first phase, authorized non-bank PSPs i.e. issuers of prepaid payment products, card networks, white label ATM operators will be eligible to participate in the centralized payment system as members.

reserve Bank of India

The Reserve Bank of India (RBI) has allowed authorized non-bank payment system providers (PSPs), including issuers of prepaid payment products, to be direct members in Centralized Payment Systems (CPS) such as Real Time Gross Settlement (RTGS) and National Electronic Funds Transfer (NEFT). as approved to participate. PSP includes prepaid payment product (PPI) issuers, card networks, white label ATM (WLA) operators and trade receivable discounting system (TRADES).

RBI said in a notification that after a review of the existing arrangements and detailed consultations with PSPs, it is advised that in the first phase, authorized non-bank PSPs i.e. issuers of prepaid payment products, card networks, white label ATM operators will be eligible to participate as a member in the centralized payment system.

Explain that the central bank had announced in the monetary policy of April 2021 that it would encourage the participation of non-banks in the centralized payment system-RTGS and NEFT system operated by RBI in a phased manner.

These benefits will be

The central bank said that direct access to CPS for non-banks reduces risk in the payment environment. The notification said that this step will have benefits like reduction in cost of payment for non-banks, reducing dependence on banks, reducing time taken to complete payments.

In order to promote digital payments in the country, the Reserve Bank stopped charging fees on transactions done through NEFT and RTGS from July 2019. NEFT is used for transactions up to Rs 2 lakh, while large transactions are done through RTGS.

What is RTGS system

RTGS i.e. Real Time Gross Settlement means quick transfer of money. The way of transferring money through banks is different. When we transfer money through banks, we have to fill the form. It is checked at the counter, then we give the money to the bank employee who deposits it in the account for which we have filled the form. This work does not happen in real time. That is, it does not happen that the button was pressed here and it got deposited there. It takes some time. On the contrary, in RTGAC there is a delay of just clicking and the money gets transferred to the other account. RTGS is used through internet only for instant money transactions.

NEFT works on the slot system and there is a slot every half an hour, in which the transfers made in half an hour are completed simultaneously. However, the limit for sending money from this is Rs 10 lakh and you can easily send money anytime. Earlier money could be sent through NEFT only on the working day of those banks, but now money can be sent anytime.

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