What changed
RBI highlighted that high service charges were constraining growth of electronic payment systems. It waived its own service charges on ECS and EFT transactions up to March 31, 2006, and noted that RTGS transactions had no service charge from the start, with the waiver also valid until that date. Banks were explicitly asked to review their service charges on electronic payments to encourage adoption.
What it means for you
Banks need to reassess their fee structures for electronic payment products to make them more affordable for customers. Lowering charges can accelerate the shift from paper-based to electronic transactions, which in the long run reduces operational costs and improves efficiency for banks. This aligns with RBI's broader goal of building a robust digital payment ecosystem.
What you must do
- Review and reduce service charges on RTGS, ECS, and EFT transactions to promote electronic payments.
- Develop and expand delivery channels for electronic payment services using RBI's payment systems without further delay.
- Acknowledge receipt of this circular and report action taken to RBI.
Who it affects
Scheduled commercial banks (excluding Regional Rural Banks), Customers using electronic payment products
Why did RBI waive service charges on ECS and EFT?
RBI waived its own service charges on these transactions up to March 31, 2006, to remove cost barriers and encourage banks and customers to adopt electronic payment systems over paper-based ones.
Does this circular apply to all banks?
It applies to all scheduled commercial banks except Regional Rural Banks, as per the addressee list in the circular.
What is the deadline for banks to act on this?
The circular does not specify a strict deadline, but banks are urged to act without delay and to acknowledge receipt and advise RBI of action taken.