NEFTs get faster because banks will process them every 30 minutes now

RBI has reduced the settlement time for

clearance of NEFT from 1 hour to 30 minutes

Mumbai, April 10: On 6 April, the Reserve Bank of India in its monetary policy announcement said that it has decided to reduce the settlement time for clearance of National Electronic Funds Transfer (NEFT), from 1 hour to 30 minutes. Here is what it means for you:

NEFT is one of the electronic payment systems in the country. It allows you to send money from one bank to another. You can send the money only during a certain hours. The fund transfer happens in batches. So far, NEFT payment settlement happened in hourly batches. Now this has been changed to every half an hour. Hence, in a weekday (Monday to Friday) the batch between 8 am to 7 pm will have 23 batches. So far there were only 12 batches.

On Saturdays, NEFT settlements happen between 8 am and 1 pm. Now, instead of six batches, it will be settled in 11. There is no NEFT on Sundays.

The cost of sending money using NEFT depends on the bank that you are transacting with. However, the RBI has issued guidelines on the costs too. For receiving money over NEFT, you don’t have to pay any charges. For sending, you will be charged a fee.

For an amount up to Rs10,000, the banks can’t charge you more than Rs2.50, excluding service tax. If you send between Rs10,001 and Rs1 lakh, you will be charged Rs 5 plus service tax, and for transactions between Rs1 lakh and Rs2 lakh, charges would be Rs15 plus service tax. For transactions above Rs2 lakh, the charge would be Rs25 plus service tax.

Banks are also supposed to pay 25 paise per transaction to the clearing house as well as destination bank, as service charge. However, it cannot be passed on to the customers.

To send money using NEFT, you need to have an account with a bank that allows you to do fund transfer using NEFT. You need to have your beneficiary’s bank account details such as account number, name of the receiver, and IFSC code. Once you add the beneficiary, you will have to wait for half an hour for the beneficiary to get registered. Once registered, you can start sending the money.

According to RBI, In case of non-credit or delay in credit to the beneficiary account, you can contact the NEFT customer facilitation centre of your bank; details of which is available on bank websites.

Banks get time till June 30 to obtain PAN from account holders

New Delhi, April 7 (PTI): The Tax Department has given banks three more months till June 30 to obtain permanent account number (PAN) or Form—60 from all account holders as it looks to tighten the noose around evaders.

Though the deadline for getting the PAN or Form 60 (if PAN is not available) by banks ended on February 28, the tax department on April 5 notified the extension of the time till June 30.

In the notification, the Income Tax Department said that in Income—Tax Rules 114B, in the fourth proviso, “for the figures, letters and words ‘28th day of February’ the figures, letters and words ‘30th day of June’ shall be substituted.”

Rule 114B lists various transactions for which quoting PAN is mandatory. The tax department had in January asked banks, post offices and cooperative banks to document PAN or declaration of Form 60 received from account holders and maintain all records for transactions under Rule 114B of I—T Act.

It had said that persons who have not quoted PAN, or did not furnish Form 60 at the time of opening account, will have to provide the same by February 28. Form 60 is a declaration form filed by an individual without PAN.

Following the demonetisation move effective November 9, the tax department had asked banks and post offices to report to it all deposits above Rs 2.5 lakh in savings accounts and more than Rs 12.50 lakh in current accounts made between November 10 and December 30, 2016.

Also, cash deposits exceeding Rs 50,000 in a single day had to be reported. With an estimated Rs 15 lakh crore in junked currency notes coming back into the banking system post demonetisation, the tax department has started analysing the bank deposit trends.

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Govt asks public sector banks to finalise next wage revision before 1 November

In a communication to CEOs and MDs of the state-owned banks, the finance ministry advised them to initiate the steps for smooth conclusion of next wage revision

New Delhi, April 9 (PTI): The finance ministry has asked the heads of public sector banks (PSBs) to finalise the modalities for timely implementation of the next pay revision from November.

There are 21 public sector banks, post merger of six lenders with State Bank of India (SBI), in the country. They together employ about 8 lakh people.

In a communication to CEOs and MDs of the state-owned banks, the ministry advised them to initiate the steps for smooth conclusion of next wage revision of the employee within the time-frame. “However, it is seen that several banks are yet to proceed in the matter,” it said, requesting the PSBs to “look into the matter and conclude the next wage revision prior to the effective date of 1 November 2017”.

The wage revision of public sector bank employees takes place every five year. The last revision was effected in November 2012. In the last wage negotiation between PSU banks employee unions and bank management, Indian Banks’ Association (IBA) had settled at 15% hike. Recently, Banks Board Bureau chief Vinod Rai had made a case that the compensation package across the board of public sector banks needs to be improved.

“Maybe, we are not able to do much with the fixed part of compensation package but (with) variable part we are hopeful that in the next financial year (2017-18), we will be able to introduce a far more attractive package which do have bonuses, ESOPs and other performance linked incentives as part of the package,” he had said. Rai has also suggested that managing directors of the public sector banks should be appointed for minimum 6 years.