Home/ News / India/  RBI: Large fund transfers to be 24/7, contactless card payment hiked to 5,000

MUMBAI: Customers will soon be able to transfer funds through real-time gross settlement (RTGS) will be available round-the-clock in the next few days, Reserve Bank of India (RBI) governor Shaktikanta Das said on Friday.

“The RTGS system will soon be made 24/7 in the next few days and this was announced in the last policy. With this enablement, it is proposed to reduce settlement and default risks in the system by facilitating settlement on all days of the week, instead of five days earlier," said Das.

RTGS enables real-time transfer of funds to a beneficiary’s account and is primarily meant for large-value transactions. Real time means the processing of instructions at the time they are received and gross settlement implies that settlement of funds transfer instructions occurs individually.

At present, RTGS is not a 24x7 system and is available on all days when most bank branches are functioning, including Saturdays. The minimum amount that can be remitted through RTGS is 2 lakh. There is no upper limit.

RBI has been trying to make electronic mode of payments more convenient for businesses. RBI had allowed transfer of funds via National Electronic Funds Transfer (NEFT) system on a 24x7x365 basis from December 2019.

That apart, the central bank has also decided to increase the limit for contactless card transactions (without requiring to input a pin number) and recurring payment mandates through cards and unified payments interface (UPI) to 5,000 from 2,000 earlier. This will be effective from 1 January 2021 and will be at the discretion of the user.

This, the governor said, will ensure adoption of digital payments in a safe and secure manner

Shayan Ghosh
Shayan Ghosh is a national writer at Mint reporting on traditional banks and shadow banks. He has over a decade of experience in financial journalism. Based in Mint’s Mumbai bureau since 2018, he tracks interest rate movements and its impact on companies and the broader economy. His interests also include the distressed debt market, especially as India’s bankruptcy law attempts recoveries of billions worth of toxic assets.
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Updated: 04 Dec 2020, 10:58 AM IST
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