Govt limits charges on electronic fund transfer over Rs 1,000

New Delhi, Dec. 21: In order to encourage digital transactions, the Finance Ministry today asked public sector banks to restrict fee on payments through IMPS and UPI to the extent that is applicable for NEFT fund transfer of over Rs. 1,000.
As per RBI norms, NEFT transfers of up to Rs. 10,000 attract Rs. 2.5 fee. From Rs. 10,000-1 lakh the fee is Rs. 5; on Rs. 1-2 lakh it is Rs. 15, and beyond Rs. 2 lakh it is Rs. 25. Service tax is charged in addition to this.
For Unstructured Supplementary Service Data (USSD) transactions above Rs. 1,000, the ministry said a further discount of 50 paise on these rates shall apply. USSD is mobile short code message and used mainly for banking services on feature phone.
The USSD fee is Rs. 1.50, which has been waived till December 30, 2016.
In order to further promote digital and card payments, the ministry has issued a direction in public interest to all Public Sector Banks, said an official statement.
In accordance with this “these banks shall not charge fees for transactions settled on Immediate Payment Service (IMPS) and Unified Payments Interface (UPI) in excess of rates charged for National Electronic Funds Transfer (NEFT) for transactions above Rs. 1000, with service tax being charged at actuals”, it said.
IMPS is an interbank electronic instant mobile money transfer service through mobile phones. The UPI app enables customers to make online as well as offline payment to merchants from their bank accounts, without typing card or net banking/wallet details and IFSC code.This direction will apply for all transactions up to March 31, 2017.
“For USSD transactions above Rs. 1,000, a further discount of fifty paise on these rates shall apply,” it added.
In order to promote digital transaction, Niti Aayog has announced two schemes – Lucky Grahak Yojana and Digi Dhan Vyapar Yojana’, to be launched on December 25. The schemes will cover small transactions between Rs. 50 and Rs. 3,000.
Transactions using RuPay, USSD, UPI and Aadhar Enabled Payment System (AEPS) will be covered under this scheme; payments made through credit cards and e-wallets would not be covered.
In line with the central government’s objective of promotion of payments through cards and digital means over payments in cash, the Reserve Bank has recently rationalized customer charges for transactions up to Rs. 1,000 settled on IMPS, UPI and USSD from January 1-March 31, 2017.
RBI has also rationalised the Merchant Discount Rate (MDR) for debit card transactions up to Rs. 2,000 for the 3-month period.

Over 70% rural citizens have adopted e-wallets, says govt

More than 70 per cent of the rural population has adopted e-wallets, the Ministry of Electronics and Information Technology said today. “An overview of the current data available with the Ministry of Electronics & IT (MeitY) shows that more than 70 per cent rural citizens have adopted the methods of e-wallets, 16 per cent opted for Unified Payment Interface (UPI),” the ministry said in a statement.
Rest of the people looked at Unstructured Supplementary Service Data (USSD), Adhaar Enabled Payment System (AEPS) & Cards or Point of Sale(PoS).
Similarly, more than 85 per cent of merchants have adopted the e-wallets and 13 per cent have opted for UPI, the statement said.
“The speed and scale at which digital transformation in taking place in India is paving the way for a digitally empowered, participative and inclusive society,” MeitY Secretary Aruna Sundararajan said.
Under its Digital Payments awareness and training programme, the ministry said that Common Service Centre (CSC) network, which provides government service in rural area, has enrolled over 25 lakh rural citizens for digital payments.
“Achieving the 25 lakh mark in such a short time is an indication of the pace at which digital adoption is gaining momentum among rural citizens,” Aruna Sundararajan said.
“Over 55,000 merchants have started offering digital payment options to rural customers across various districts and blocks in India,” the statement said.
The DigiDhan Abhiyan aims to reach over 1 crore rural citizens through this massive outreach programme. The campaign aims to cover 2 lakh Common Service Centres (CSC) in rural and semi-urban areas and also reach out to 2.5 lakh Gram panchayats across the country. The centres will cover one member from each household and will cater to 40 households in a catchment area.