Fintech companies were allowed to process RTGS and NEFT transactions after RBI announced certain regulations related to digital payments on Wednesday. Along with this, inter portability facility and cash withdrawal facility were also allowed. That is, now RTGS and NEFT payments will also be possible through Paytm, Visa, MasterCard and Phone Pay.
Right to process RTGS and NEFT only with banks
RBI Governor Shaktikanta Das said on Wednesday that pre-paid instruments issuers, card networks and TREDS operators would be allowed to become members of centralized payment systems such as RTGS and NEFT systems. This step of RBI is very important because a large amount is transferred under RTGS and NEFT. It is used for interbank settlement and business pay-outs. Till now only banks have the right to process RTGS and NEFT.
What is NEFT and RTGS?
NEFT means National Electronics Fund Transfer. This is an electronic fund transfer system, through which you can transfer money from one bank account to another bank account easily and securely. RBI conducts this fund transfer process. The full name of RTGS is Real Time Gross Settlement. Its job is also to transfer money online like NEFT. As the name itself suggests, it can be easily and securely transferred from one account to another in real time. This is especially for those people who transfer money more and larger amount throughout the day like businessman etc.
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