RBI waives processing charges for all electronic fund transfers of Rs 2 crore and above

What changed

Previously, transactions of Rs 2 crore and above attracted a flat processing fee of Rs 50 per transaction, while smaller amounts were already free. Now, even large-value electronic transfers are completely free of processing charges, with the waiver valid until March 31, 2006.

What it means for you

Banks can now offer cost-free electronic fund transfers for high-value transactions, encouraging corporate and institutional clients to shift from paper-based instruments. This reduces operational costs for banks in the long run but may temporarily lower fee income from large-value transfers. The move aligns with RBI's push for a faster, more efficient payment ecosystem.

What banks were required to do at the time

• Update your system to stop charging processing fees on EFT, SEFT, and ECS transactions of Rs 2 crore and above from June 14, 2005.
• Communicate the waiver to your corporate and high-value customers to promote electronic payment adoption.
• Monitor transaction volumes and costs to assess the impact on fee income and operational efficiency.
• Ensure compliance with the waiver period ending March 31, 2006, and prepare for any subsequent changes.

Who it affects

Scheduled commercial banks, Corporate and institutional customers making large-value electronic transfers