Banks

Finance Ministry Asks Banks to Go for Cashless Transactions

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To promote cashless transactions, the Finance Ministry has asked public sector banks to take steps to reduce the fee to zero for electronic transfer of funds up to Rs one lakh. Currently, most banks charge a maximum fee of Rs 5 per transfer of funds up to Rs 1 lakh from one account to another through National Electronic Funds Transfer (NEFT) system. Transfer of funds up to Rs 10,000 through NEFT system attracts a maximum charge of Rs 2.50 per transaction.

In a recent communication to the state-owned banks, the Ministry had asked them to “take action” to reduce the NEFT charges to zero for value up to Rs 1 lakh. RBI has, however, retained maximum charges of Rs 15 per transaction for electronic transfer of funds beyond Rs 1 lakh to less than Rs 2 lakh. The government has been asking banks to encourage transactions through e-payment channels so as to reduce the number of transactions through cheques and other expensive modes of transactions.

The public sector banks have also been asked to identify top 20 per cent branches in respect of business volumes to bring down the number of cheque based transactions by at least one-fifth in the current financial year. The banks have also been asked to ensure that all payments and disbursements by them, except sundry payments, are made only electronically.

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