Government restricts charges on electronic fund transfers

As per RBI norms, NEFT transfers of up to Rs 10,000 attract Rs 2.5 fee. From Rs 10,000-1 lakh the fee is Rs 5; on Rs 1-2 lakh it is Rs 15, and beyond Rs 2 lakh it is Rs 25. Service tax is charged in addition to this. 

For Unstructured Supplementary Service Data (USSD) transactions above Rs 1,000, the ministry said a further discount of 50 paisa on these rates shall apply. USSD is mobile short code message and used mainly for banking services on feature phone. The USSD fee is Rs 1.50, which has been waived till December 30, 2016. 

In order to further promote digital and card payments, the ministry has issued a direction in public interest to all Public Sector Banks, said an official statement. In accordance with this “these banks shall not charge fees for transactions settled on Immediate Payment Service (IMPS) and Unified Payments Interface (UPI) in excess of rates charged for National Electronic Funds Transfer (NEFT) for transactions above Rs 1000, with service tax being charged at actuals”, it said. 

IMPS is an interbank electronic instant mobile money transfer service through mobile phones. The UPI app enables customers to make online as well as offline payment to merchants from their bank accounts, without typing card or net banking/wallet details and IFSC code. This direction will apply for all transactions up to March 31, 2017. 

“For USSD transactions above Rs 1,000, a further discount of fifty paise on these rates shall apply,” it added.