What changed
Earlier, only payments above Rs 1 crore by RBI regulated entities in RBI regulated markets had to be routed through electronic systems like RTGS, NEFT, or ECS. Now, the threshold has been lowered to Rs 10 lakh, effective August 1, 2008, based on a review showing smooth migration to electronic modes.
What it means for you
Banks must ensure all payment transactions above Rs 10 lakh are processed electronically, reducing reliance on paper-based instruments. This move aims to further digitize high-value payments and enhance efficiency in the payment system.
What you must do
- Update internal systems and procedures to enforce electronic routing for all payments above Rs 10 lakh from August 1, 2008.
- Communicate the revised threshold to all branches and customers to ensure compliance.
- Monitor transaction flows to confirm seamless migration and report any issues to RBI.
- Acknowledge receipt of this circular and confirm action taken.
Who it affects
All commercial and cooperative banks, RBI regulated entities, Customers making large-value payments above Rs 10 lakh
What is the new threshold for mandatory electronic payments?
The threshold has been reduced from Rs 1 crore to Rs 10 lakh, effective August 1, 2008.
Which payment systems are covered under this mandate?
RTGS, NEFT, and ECS are the electronic systems that must be used for transactions above Rs 10 lakh.
Why did RBI lower the threshold?
A review showed that most large-value payments had already migrated smoothly to electronic modes, and the payment systems and users have achieved sufficient comfort levels.