Reserve Bank of India Deputy Governor, Dr. KC Chakrabarty has rejected the possibility of free e-transactions as the finance ministry had earlier suggested. Dr. Chakrabarty feels that it would not be a viable solution.
Dr. Chakrabarty raised questions over the viability of the proposed ‘free' electronic transactions and said "Anything (product and services) that is offered free of charges can never be scaled up...It cannot be commercially viable and viability is the key." He also added that the costs would come down themselves with the scale of use.
Currently the banks charge anywhere between Rs. 5 to 55 on inter-bank electronic funds transfer made using the National Electronic Funds Transfer (NEFT) or Real Time Gross Settlement (RTGS). Oriental Bank of Commerce had recently removed transaction charges on NEFT transactions up to Rs. 1 lakh.
Emphasis should be given to improve customer experience and streamline the processes, providing cost effective technology, specially designed products and services to meet the needs of small and marginalized customers; a better MIS and improving financial literacy among the customers.
Dr. Chakrabarty further added that the RBI's job is to make the use of technology in banking as safe and viable as possible.