MUMBAI: The Reserve Bank of India permitted regional rural banks (RRBs) and cooperative banks to take part in the centralised payment systems with the aim to popularise electronic transfer of funds. Now, all the banks can transfer funds electronically via real time gross settlement system (RTGS) and national electronic funds transfer (NEFT).
Currently, the centralised payment systems - RTGS and NEFT can be accessed just by members that consisted of public and private sector banks. As an exception, RRBs are allowed to use the NEFT system via their sponsor banks.
According to a RBI notification, “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.”
NEFT is an electronic transfer of funds system which is meant for retail customers and the RTGS system is helpful in high-value transfer of money with threshold limit of Rs 2 lakh. It would be an alternate mechanism to all licensed banks which got technological capabilities but are not taking part in centralised payment systems.