Home › Circulars › RBI/2010-11/559

RBI allows processing charges on NEFT, NECS, RECS, ECS from July 2011

No longer current — replaced by Waiver of processing charges and time-varying charges for RTGS/NEFT

Source: Reserve Bank of India · RBI/2010-11/559 · issued 02 Jun 2011 · ~2 min read

Quick answerRBI has ended the waiver on processing charges for retail electronic payment systems (NEFT, NECS, RECS, ECS) effective July 1, 2011. Clearing houses can now levy 25 paise per outward/return transaction on originating banks, and destination banks will receive compensation from originating banks.

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.

Historical instruction — do not use for current compliance. This is what was required at the time; it no longer reflects current RBI requirements. If no replacement rule is linked above, that only means none is recorded on our register yet — it does not prove no later applicable rule exists. Confirm on the official RBI source below.

What banks were required to do at the time

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

❓ Common questions

Regulatory timeline

Stated effective date effective July 1, 2011
Decoded by BankPulse 2026-06-19 01:15 IST
Superseded by — Waiver of processing charges and time-varying charges for RTGS/NEFT
Status change: superseded 03 Aug 2026, 04:00 IST

Built from our lineage records — each fact carries its provenance; missing history simply is not shown (never guessed).

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.

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Superseded by Waiver of processing charges and time-varying charges for RTGS/NEFT

📜 Read the original circular — full text as issued by RBI

RBI/2010-11/559
 DPSS (CO) EPPD No. /2649/ 04.03.01/2010-11 
 June 02, 2011
 The Chairman and Managing Director / Chief Executive Officer
 of member banks participating in  NEFT / NECS / RECS / ECS 
 Madam / Dear Sir,
 Retail Electronic Payment Systems – NEFT / NECS / RECS / ECS – Levy of Processing Charges 
 As you are aware, the Reserve Bank of India has been waiving processing charges for retail electronic payment products (NEFT, NECS, RECS and ECS) since the year 2006 in order to promote the usage of these systems. The last waiver was valid up to March 31, 2011.  In recent years, the usage of these products has increased considerably.  While the originating banks are levying charges on their customers, there has been no compensation paid to the processing centers and destination banks. There has been demand for compensation from the paying banks / processing centres. 
 2. On a review and after consultation with stakeholders, it has now been decided to permit  Clearing Houses / processing centers to levy charges on the originating banks as under :-
 25 paise (exclusive of service tax) for every outward transaction 25 paise (exclusive of service tax) for every return transaction 3. As regards the compensation to destination banks, it has been decided that destination banks may be paid by the originating banks as below :-
 25 paise (exclusive of service tax) for every credit transaction 50 paise (exclusive of service tax) for every debit transaction The necessary data on number of transactions originated and received by each bank will be provided by Clearing Houses / Processing Centers on a monthly basis. Using this, banks may put in place necessary systems to calculate the compensation payable / receivable to / from other banks and settle the same amongst themselves.
 4. The charges may be collected on a monthly basis. The participant banks are not permitted to pass on these charges to customers. 
 5. These charges will be applicable from July 01, 2011. All Clearing Houses / processing centres are required to put in place a system of recovering their processing charges, and also dissemination of suitable data to banks as above. 
 6. Please confirm the receipt of this letter and action taken in the matter.  
 Yours faithfully
 (G. Padmanabhan)
 Chief General Manager

Reproduced for reference with acknowledgment — Source: Reserve Bank of India · RBI/2010-11/559 · issued 02 Jun 2011. The plain-English explanation above is BankPulse’s own independent summary.

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BankPulse Compliance Evidence Pack — generated 03 Aug 2026 · status cross-checked against RBI’s official withdrawal register (refreshed weekly).
Official RBI source: https://www.rbi.org.in/Scripts/NotificationUser.aspx?Id=6453&Mode=0 — Plain-English summary by BankPulse (bankpulse.ai), reviewed by our expert reviewer, CA Amit Jain. Independent platform, not affiliated with the Reserve Bank of India; is our own plain-English paraphrase, not RBI’s original wording.