NEW DELHI: With effect from today, the Reserve Bank of India (RBI) has waived off all charges on fund transfer through Real Time Gross Settlement System (RTGS) and National Electronic Funds Transfer (NEFT) System. This, in turn, will result in lowering of fund transfer charges for bank customers.

After reviewing various charges levied by it on the member banks for transactions processed in the RTGS and NEFTsystems, RBI has asked banks to pass on the benefits to the customers with immediate effect.

While RTGS is used for real time transfers of funds above ₹2 lakh, NEFT is used for fund transfers of up to ₹2 lakh.

Indian Banks' Association Chairman Sunil Mehta the RBI's move will help banks reduce the fees for RTGS and NEFT payments.

India's largest bank, the State Bank of India (SBI), for example, charges anything between Re 1 and ₹5 for transactions through NEFT and between ₹5 and ₹50 for RTGS route.

In order to provide an impetus to digital funds movement, the RBI has further decided that with effect from today, processing charges and time varying charges levied on banks by RBI for outward transactions through the RTGS, as also the processing charges for transactions processed in NEFT will be waived by the central bank.

The Reserve Bank levies "minimum charges" on banks for transactions routed through its RTGS and NEFT, and banks, in turn, levy charges on their customers.

From last month, the RBI had extended the time window for RTGS by one-and-a-half hour for bank customers. Previously the timing for any RTGS transaction was till 4:30 pm. Now it has been extended to 6 pm.