What changed
RBI reiterated that banks must provide originating customers the option to choose between RTGS and NEFT at the time of initiating a funds transfer. The option must be available across all channels—branch, internet, or any other means. Funds must be transferred strictly through the customer's chosen mode.
What it means for you
Banks can no longer default to one system or override customer preference. This empowers customers to decide based on time criticality, transaction value, and charges. Banks must update their systems and processes to ensure the choice is clearly presented and honored.
What you must do
- Update all fund transfer interfaces (branch, internet, mobile) to offer a clear RTGS/NEFT choice at initiation.
- Train branch staff and customer service teams to explain the differences between RTGS and NEFT to customers.
- Ensure backend systems process the transaction exactly as per the customer's selected mode without any override.
- Review and amend any internal procedures that currently default to one system without customer consent.
- Audit compliance across all channels and report readiness to the RBI as required.
Who it affects
All member banks participating in RTGS and NEFT, Retail and wholesale banking operations teams, IT and digital banking departments, Branch staff handling remittances, Customers initiating domestic funds transfers
Does this circular apply to all types of customers?
Yes, the option must be made available to all customers who originate remittances, whether at a branch, through internet banking, or any other channel.
Can a bank still suggest a preferred system to the customer?
Banks can inform customers about the features of RTGS and NEFT, but the final choice must rest with the customer, and the transaction must be processed accordingly.
What happens if a bank fails to provide this option?
RBI has directed strict compliance. Non-compliance may attract regulatory action, including penalties or restrictions on payment system participation.