The Reserve Bank of India (RBI) has extended National Electronic Transfer (NEFT) and Real Time Grass Settlement (RTGS) facility to non-bank payment system operators. The Reserve Bank of India provided this information on Wednesday. So far, only banks have had this facility. Moreover, the Reserve Bank has increased the digital payment limit from one lakh to two lakh.
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According to a new announcement by the Reserve Bank of India, prepaid payment providers, card networks, white label ATM operators and trading contract discounting platforms will also be able to use RTGS and NEFT. Speaking at a press conference, RBI Governor said, “The central payment system operated by the Reserve Bank of India has limited the membership of RTGS and NEFT to the bank with few exceptions. It is now expanding its reach to ‘online users like PayTM, Phone Pay and Google Pay.
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The digital payment limit has been increased to two lakhs
To promote digital payments, the Reserve Bank of India has decided to increase the transfer limit. Customers are now able to transfer up to Rs 2 lakh through online payment mode such as phone payment and PayTM. Earlier this limit was only one lakh rupees. However, there was a demand to increase this limit to Rs 5 lakh.
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What is RTGS and NEFT?
RTGS is a fast process of fund transfer. With this system you can transfer money from one bank account to another. The full form of RTGS is the Real Time Grass Settlement. If you look at the difference between RTGS and NEFT, they both work in electronic fund transfer in a bank account. While there is no limit to transfer money in NEFT, you will need to transfer at least two lakh rupees in RTGS. At NEFT, money takes a while to reach another account, but it can be reached immediately on RTGS. In IMPS, money is immediately transferred to someone else’s account. The service operates 24 hours a day, seven days a week.