What changed
RBI had been waiving processing charges for NEFT, NECS, RECS, and ECS since 2006 to promote usage, with the last waiver valid until March 31, 2011. After a review and stakeholder consultations, RBI decided to permit clearing houses to charge originating banks 25 paise per outward transaction and 25 paise per return transaction, and allow destination banks to be paid 25 paise per credit and 50 paise per debit transaction by originating banks.
What it means for you
Banks that originate transactions will now have to pay processing charges to clearing houses and compensation to destination banks, which were previously free. This increases operational costs for originating banks, but they are explicitly prohibited from passing these charges on to customers. Banks must set up systems to calculate and settle these inter-bank payments monthly using data from clearing houses.
What you must do
- Ensure your bank's systems can calculate compensation payable/receivable to/from other banks using monthly data from clearing houses.
- Set up monthly settlement mechanisms with other banks for the new charges, effective July 1, 2011.
- Do not pass on these processing charges to customers; absorb them as per RBI directive.
- Confirm receipt of this circular and report action taken to RBI.
Who it affects
Member banks participating in NEFT, NECS, RECS, and ECS, Clearing houses and processing centers, Originating banks and destination banks
Can banks charge customers for these processing fees?
No, RBI explicitly prohibits participant banks from passing on these charges to customers. The fees must be absorbed by the banks.
When do these charges become effective?
The charges are applicable from July 1, 2011. Banks and clearing houses must have systems in place by then.
How will banks know the transaction volumes for settlement?
Clearing houses and processing centers will provide monthly data on the number of transactions originated and received by each bank, which banks will use for inter-bank compensation calculations.