You may still have to visit your bank branch for making high-value transactions

The covid-19 pandemic is spreading rapidly as cases spike with each passing day. With social distancing becoming the new normal, customers may find it difficult to carry out high-value transactions through the bank’s mobile application or website because banks impose a limit to mitigate risks.

Banks generally put an upper cap on daily fund transfer in order to limit the risk of the customer in case of a wrongful transaction or fraud. However, as per the Reserve Bank of India (RBI) regulations, there is no cap on the amount of money one can transfer through National Electronic Funds Transfer (NEFT) and Real-Time Gross Settlement (RTGS). Immediate Payment Service (IMPS) and Unified Payments Interface (UPI), on the other hand, have a cap of ₹2 lakh and ₹1 lakh, respectively.

Experts said another reason for having a cap could be to lower the bank’s liquidity risk. “RBI has given banks the freedom to set their own upper ceiling on NEFT and RTGS transactions based on their risk and liquidity management. Banks have placed certain special upper limits on their NEFT transactions applicable on RTGS holidays and off-business hours since the introduction of 24/7 NEFT facility,” said Sahil Arora, director at Paisabazaar.com.

State Bank of India, for example, has a cap of ₹10 lakh on RTGS transactions whereas HDFC Bank has a ₹25 lakh upper limit. Kotak Mahindra Bank has a per-beneficiary cap of ₹5 lakh and a per-day transaction limit of ₹10 lakh for NEFT transactions.

“Our retail customers can transfer up to a maximum of ₹20 lakh in a day using both mobile and internet banking channels via RTGS, NEFT, IMPS and UPI,” said Jithesh P V, deputy vice-president and head digital, Federal Bank.

“We have set a daily upper cap limit of ₹10 lakh for our retail mobile banking application; FedMobile and our customers can do payments or transfers, including NEFTs up to this limit on a daily basis. This limit is based on an analysis of transaction data and the risk policies of the bank,” he said.

Adhil Shetty, CEO of BankBazaar said the limits vary depending on the customer segment, the tool used for the transaction and the channel. “Some banks allow customers to transfer as much as ₹25 lakh while others restrict it to ₹10 lakh. For instance, one bank limits the maximum amount of funds that can be transferred via online NEFT transfer to ₹2 lakh, but allows multiple transactions for a total value of ₹25 lakh or the third-party transfer limit chosen by the customer,” he said.

Further, banks also give customers the choice to put a cap on the transaction limit, which is useful in case the customer wants to have a lower cap in order to eliminate risks.

For example, Federal Bank offers retail customers three net banking limit options to choose from. The customer has a basic limit of ₹30,000 when they log in and have three kinds of limits— ₹1 lakh, ₹5 lakh, and ₹10 lakh for fund transfer. Beyond the set limits, most banks require customers to visit the branch to make the transaction.

“A retail customer can transfer up to a maximum of ₹20 lakh in a day using both mobile and internet banking channels such as RTGS, NEFT, IMPS and UPI. Customers can always use the branch channel for transferring money beyond this limit. However, in our corporate net banking channel, corporate clients can set their required limit without any restrictions,” said Jithesh.