In a move that has given online payments a humongous push, the Central Bank of India, RBI, announced National Electronic Funds Transfer (NEFT) services would be available 24X7 from December 2019. Currently, the system is operated by RBI on all working days of the body.
NEFT is an online payments system that provides fund transfers from one bank to another for transactions up to INR 2 lakh. RTGS or Real Time Gross Settlement is another system of the same nature that is used to carry out transactions of a larger value.
“The Reserve Bank will make available the NEFT system on a 24×7 basis from December this year. This is expected to revolutionize the retail payments system of the country,” Governor Shaktikanta Das was quoted as saying during the Monetary Policy press conference.
RBI has been upping its game when it comes to ensuring that a road that paves way for more seamless and secure transactions in India. Despite struggling with technological handicaps, infrastructural misses, India is growing to become a fully digitized economy like U.S.A or China.
A Zero Cost Anytime Solution
Bhavin Patel, Co-Founder & CEO, LenDenClub, feels that this is a great move, “This is an important step for them to achieve their Payment Vision 2019 to 2021. This was a major demand from everyone, be it for business or personal transactions.”
Patel also highlights that as a loan providers, this will help in disbursing loans quickly because there will be no restriction on timings for NEFT. “Borrowers will also get the opportunity to clear their EMIs whenever they want to irrespective of holidays. Today, IMPS is any time money transfer solution but it comes with extra cost. NEFT will be a zero cost any time solution for common man.”
Moving Towards a Digital Economy
Abhishek Gandhi, Co-Founder & CFO, RupeeCircle, feels that this move will definitely benefit fintech P2P companies as now funds can be transferred to borrowers as soon as loans are approved. “Also, lenders would now be able to withdraw/deposit money to their wallet using NEFT round the clock.”
According to Gandhi, this shall help in improving the TAT for funding loans listed on a marketplace.
Gaurav Chopra, CEO and Founder, IndiaLends, says that the RBI’s decision to allow round-the-clock National Electronic Funds Transfer from December this year to promote digital transactions is in line with the apex bank’s aim to achieve “a highly digital and cash-lit society.” He further adds, “In a move to boost digital transaction, earlier in June this year RBI had done away with charges on fund transfers through RTGS and NEFT. This move will also go a long way to enhance financial inclusion in the country.”
Additionally, for retail credit now customers won’t have to wait for working weekdays or working office hours to receive their loan amount.
This, indeed, gives more space and time to both parties at two different ends of a transaction. Surely, seamless and secure transactions are becoming better and better with each passing day.