Online funds transfer through NEFT to be now available 24x7: RBI

The six-member Monetary Policy Committee (MPC) of the Reserve Bank of India (RBI) Friday said that the online money transfer through National Electronic Funds Transfer (NEFT) will be available 24x7 from now onwards.

Presently, the facility is available till 7:45 pm on all working days except 2nd and 4th Saturdays of the month.

"In order to facilitate smooth settlement of these transactions in the accounts of the banks maintained with RBI, it has been decided that the Reserve Bank will extend the collateralised liquidity support, which is currently available till 7.45 pm on NEFT working days, round the clock," the RBI announced in its Monetary Policy Review meet.

Also Read: MPC Meet: RBI to remove charges on NEFT, RTGS transactions

The apex bank also said that round-the-clock NEFT facility will strengthen the fund management system of banks. The move is likely to reform the retail payments system in India.

In line with industry expectations, the central bank's MPC on Friday cut the key repo rate by 25 basis points to 5.15 per cent -- its fifth straight cut this year -- and maintained its 'accommodative' stance.

Also Read: Fund transfer via RTGS, NEFT set to get cheaper from tomorrow

Repo rate is the interest rate at which the RBI lends money to banks. The repo rate cut is a great incentive for borrowers as all new floating rate loans are supposed to be linked to any of the four external benchmarks prescribed by the RBI from October 1.

In its August MPC meet, the RBI had surprised everyone by going for a 35-basis-point cut to 5.40 per cent.

The apex bank's decision to cut the repo rate further seems to be in sync with the government's recent measures, including a reduction in the corporate tax, to promote credit offtake to boost economic activity during the festive season amid the ongoing slowdown.

Also Read: RBI proposes to make NEFT 24x7; here's all you need to know