The Reserve Bank of India (RBI) in its Monetary Policy Review meet today announced the extension of the collateralised liquidity support on the National Electronic Funds Transfer (NEFT) payment system to round the clock. Currently this facility is available till 7.45 pm on working days. "In order to facilitate smooth settlement of these transactions in the accounts of the banks maintained with RBI, it has been decided that the Reserve Bank will extend the collateralised liquidity support, which is currently available till 7.45 pm on NEFT working days, round the clock," RBI said. The central bank further said that this will help in better funds management by the banks.
RBI in its August Monetary Policy Review meet had announced round-the-clock availability of NEFT payment system from December 2019. Currently, NEFT payment system operated by RBI as a retail payment system is available for customers from 8.00 am to 7.00 pm on all working days of the week (except 2nd and 4th Saturdays of the month). The availability of NEFT on a 24x7 basis is expected to revolutionise the retail payments system of the country.
RBI cut its key rates by 0.25 per cent to boost economy from six-year low saying reduction was necessary to revive growth.
The repo rate, at which it lends to the system, has been brought down to 5.15 per cent to help reduce borrowing costs for home and auto loans, which are now directly linked to this benchmark.
This is the fifth straight cut in rates by the Reserve Bank in its key rates in as much policy reviews in 2019, and takes the total quantum of reductions to 1.35 per cent.