Online banking facility National Electronic Funds Transfer (NEFT) will not be available for 14 hours on May 23. “A technical upgrade of NEFT, targeted to enhance the performance and resilience, is scheduled after the close of business of May 22, 2021,” the Reserve Bank of India said in a notification earlier this week. “Accordingly, NEFT service will not be available from 00:01 hrs to 14:00 hrs on Sunday, May 23, 2021,” it further added.
“Member banks may inform their customers to plan their payment operations accordingly,” the regulator said, adding, “NEFT Members will continue to receive event update(s) through NEFT system broadcasts.”
The Real-Time Gross Settlement (RTGS) facility will continue to be operational as usual during this period, RBI said. A similar technical upgrade for RTGS was completed on April 18, the central bank mentioned.
In April, the central bank extended the NEFT and RTGS facilities to non-bank payment system operators. Now, Prepaid Payment Instrument (PPI) issuers, card networks, White label ATM operators and Trade Receivables Discounting System (TReDS) platforms can use NEFT and RTGS modes. The aim is to encourage participation of non-banks across payment systems, RBI said.
“This facility is expected to minimise settlement risk in the financial system and enhance the reach of digital financial services to all user segments. These entities will, however, not be eligible for any liquidity facility from the Reserve Bank to facilitate settlement of their transactions in these CPSs. Necessary instructions will be issued separately,” a statement by banking regulator mentioned.
“This also shows the trust that RBI has placed on payments banks to make this a move in right direction. There are still 20 per cent of unbanked citizens in the country and this will help them avail better, faster and safer services of the bank,” said Rohit Garg, co-founder and chief executive officer, Smartcoin.
“By permitting users other than the banks for RTGS/NEFT facility, the central bank will boost the reach of online payment facility in the country and minimise settlement risk,” said Sandeep Wirkhare, managing diretor and chief executive officer of Indian School Finance Company Private Limited (ISFC).
“These policy changes where NEFT and RTGS are extended beyond banks and doubling the limit for the payment banks is a real booster for the fintech sector. This will lead to faster financial inclusion with the agility and better user experience offered by the fintechs,” Mayank Goyal, founder and chief executive officer of moneyHOP.