Interestingly, the RBI's decision opposes the recommendation of its own internal study group. The RBI panel had recommended that banks levy a charge on clearing cheques to expedite the switch to electronic transfer of funds.
The RBI, however, is of the view that there cannot be a discrimination against individuals opting for paper-based transactions by levying a charge on them.
Currently, the cost of processing cheques is borne by the banks. The panel also recommended that banks might have to educate their customers on the need to shift to electronic processing and in case cheques were used, processing charges might be passed onto the customers.
The panel suggested that a migration from paper-based movement of funds to electronic transfer might require banks to offer free internet-based transactions.
It recommended that banks should be prohibited from using real-time gross settlement system for transactions below Rs 10 lakh and for regular and repetitive payments such as salaries. Repetitive payments should be routed through electronic clearing service (ECS) or national electronic funds transfer.
The panel had also prepared a roadmap to shift from paper-based transactions to electronic payments.
The panel also suggested that the electronic fund transfer may be made cheaper as an incentive. This could begin with ECS-based transactions being made free for three years and extension of legal protection available for cheque transaction to electronic funds transfer.
For certain transactions, such as reimbursement of credit card dues, payments should not be made through paper-based cheques, the panel added. Instead, ECS-based settlement (including the facility by Billjunction, Billpay) should be used for these transactions. Similarly, mobile phone payments should be made through the electronic route, the panel said.
On moving large-value transactions to the electronic platform, the panel said the central bank could make it mandatory for all major inter-bank transactions among commercial banks having accounts with the central bank to be route only through the RTGS from September.
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