The Reserve Bank of India (RBI) has proposed to examine the possibility of extending availability of National Electronic Funds Transfer (NEFT) round-the-clock on all the seven days of the week — 24×7 basis — to facilitate beyond the banking hour fund transfer.
“Need to add more features to NEFT (faster settlements, staggered payments) will also be examined,” the RBI said in its document ‘Payment and Settlement Systems in India: Vision 2019 – 2021’. The central bank will also examine the possibility to extend the timings for customer transactions in RTGS (Real Time Gross Settlement) based on industry preparedness and customer demand, the RBI said. Currently, NEFT is not allowed on Sundays, second and fourth Saturday of the month and the declared bank holidays for the calendar year. SBI offers NEFT from 8 am to 7 pm on Monday to Friday and from 8 am to 1 pm on Saturday.
Though money can be transferred through Immediate Payment Service (IMPS) round the clock, the maximum amount allowed is Rs 2 lakh. The RTGS window — used for transfer of big amounts — for customer transactions is available to banks from 8 am to 4.30 pm on a working day, for settlement at the RBI end.
It said the RBI would examine the need to consider uninterrupted and round-the-clock availability of various payment systems, gradual enhancement of limits, including differential day-night, holiday limits for transactions, subject to risk management and liquidity management.
As of now, banks are required to have different settlement accounts for settling card transactions with different card networks. “To bring in more efficiency in the system and making the process more graceful, the Reserve Bank will examine the feasibility of having a single national settlement account for all authorised card networks in consultation with the stakeholders,” the RBI document says.
Though mobile internet speed has risen, connectivity issues remain unresolved in large areas. “Therefore, providing an option of offline payments through mobile devices for furthering the adoption of digital payments shall be a focus area during this vision period,” it said. The RBI document says the Reserve Bank will require service providers to bring about transparency in pricing. “The RBI would consider a review of its instructions on customer charge for its payment systems and shift from transaction value-based pricing slabs to a fixed minimum transaction-based pricing. The approach to pricing should be towards recovery of marginal costs and to migrate to a low margin-high volume regime,” it said.
Given the current growth trend, it is expected to have 5 million active PoS (point of sale terminals) by end 2021. Digital PoS (QR code) is also expected to increase substantially and the total card acceptance infrastructure will be upscaled to six times from the present levels by end 2021. “This is expected to support aim of cash-lite economy and also shift Cash on Delivery (CoD) transactions to digital modes for e-commerce. While no specific target is considered for cash in circulation, the enhanced availability of PoS infrastructure is expected to reduce demand for cash and thus over time achieve reduction in Cash in Circulation (CIC) as a percentage of GDP,” the RBI vision document says.
According to the RBI, usage of debit cards at PoS transactions is expected to be at least 44 per cent of total debit card transactions (at PoS and ATM). In value terms, it is 15.2 per cent in 2018-19 (5.2 per cent in 2014-15) which is expected to be 22 per cent by end 2021. It also envisions increased deployment of card acceptance infrastructure across the country including at smaller centres with a substantial portion of the infrastructure taking care of processing contactless card payments.
According to the RBI, Payment Systems Vision 2021 has been formalised based on inputs from various stakeholders and guidance of the Board for Payment and Settlement Systems (BPSS). “It envisages to achieve a ‘highly digital’ and ‘cash-lite’ society through the goal posts of competition, cost effectiveness, convenience and confidence (4Cs),” it said.
With concerted efforts and involvement of all stake holders, the Payment Systems Vision 2021, with its 36 specific action points and 12 specific outcomes, aspires to enhance customer experience, the RBI said. “The RBI will implement the approach outlined in this vision during the period 2019–2021. The previous vision document covered the period 2016-2018,” it said.
IMPS Transfer is round the clock but up to Rs 2 lakh
* The central bank will also examine the possibility to extend the timings for customer transactions in RTGS (Real Time Gross Settlement), it said
* Though money can be transferred through Immediate Payment Service (IMPS) round the clock, the maximum allowed is Rs 2 lakh