NEFT transactions to be made available 24x7, other important steps taken by RBI

NEW DELHI: The Reserve Bank of India (RBI) on Wednesday announced that National Electronic Funds Transfer (NEFT) payment system "will be made available on a 24x7 basis from December 2019." Currently, the NEFT system, operated by the RBI as a retail payment system, is available from 8am to 7pm on all working days of the week (except 2nd and 4th Saturdays of the month).
"The step is expected to revolutionise the retail payments system of the country,” RBI governor Shaktikanta Das said while addressing the media after the August monetary policy review.
The announcement comes in line with RBI’s Payments Settlement Vision 2021 where it was first proposed to make all NEFT and RTGS (Real-Time Gross Settlement) transfers round the clock for customers and free for all.
The RTGS system is meant for large-value instantaneous fund transfers, while the NEFT system is used for fund transactions of up to Rs 2 lakh.
In another development, the RBI has decided to allow all categories of billers except prepaid recharges under the Bharat Bill Payment system (BBPS).
"The BBPS, an interoperable platform for repetitive bill payments, currently covers five segments viz., (i) direct-to-home (DTH); (ii) electricity; (iii) gas; (iv) telecom; and (v) water bills. In order to leverage the advantages of the BBPS and harness its full potential, it has been decided to permit all categories of billers (except prepaid recharges) who provide for recurring bill payments to participate in BBPS on a voluntary basis," the RBI stated.
It also decided "to offer 'on tap' authorisation to entities desirous to function/operate/provide platforms for Bharat Bill Payment Operating Unit (BBPOU); Trade Receivables Discounting System (TReDS); and white label ATMs."
The Reserve Bank added that "the detailed instructions will be issued by the end of September 2019."
Further, the RBI proposed to create a Central Payments Fraud Information Registry "to improve the confidence of customers in the payment systems."
"The Payment System Vision 2021 also envisages a framework for collecting data on frauds in the payment systems. In order to carry forward these efforts and ensure quick and systemic responses, it is proposed to facilitate the creation of a Central Payment Fraud Registry that will track these frauds," the RBI said.
Meanwhile, the Reserve Bank in its August bi-monthly policy meet reduced repo rate by 35 basis points to 5.40 per cent. Repo rate is the rate at which the RBI lends money to banks. This is the fourth straight rate cut from the RBI.