Commercial banks are poised to reduce charges levied on electronic transfer of funds following the Reserve Bank of India's decision to waive service charges on banks for ETF and electronic clearing service.
The RBI used to charge banks Rs 5 per transaction as processing fee for EFT and 50 paise per transaction as processing fee for ECS. The central bank on Friday announced the waiver of processing charges on ETF and ECS transactions till March 31, 2006.
The RBI has directed banks to pass on this benefit to the customer in the form of reduction in charges being levied for such transaction, it added.
IndusInd Bank, managing director, Bhaskar Ghose said the move to give fillip to other types of electronic modes of funds transfer, the rates charged would depend on relationship of the client in the bank.
At present, the bank provides this facility to elite clients (privileged customers) free of cost, while others pay Rs 10 per transaction irrespective of the amount transferred.
IDBI Bank managing director Nageshwar Rao said his bank is considering a revision a rate and will come out with the revised rates sometime next week. Currently, the bank charges no extra mark up on transactions, he added.
An official from a leading private bank said this is yet another move by the central bank to promote electronic transfer of fund settlement.
"Following the central bank move, we are contemplating a reduction in the fee charged for ETF," an executive of the bank said.
At present, this mode of fund transfer is popular among few corporates. The bank provides this facility free of charge to select high net worth clients but charges other customers.
