New RBI rules on salary, ATM fees, EMI payments and more: What does this mean for you?

The Reserve Bank of India (RBI) has recently implemented significant changes to enhance the efficiency and convenience of banking services across the country. Effective from August 1, 2021, these changes primarily pertain to the National Automated Clearing House (NACH) services, but they also include revisions to ATM fees, doorstep banking charges, and more. In this article, we will delve into these new rules, their implications, and how they may affect your day-to-day financial transactions.

Before exploring the new rules, it’s essential to understand what the National Automated Clearing House (NACH) is and why it plays a crucial role in India's banking ecosystem.

NACH, operated by the National Payments Corporation of India (NPCI), is a centralized system that facilitates interbank, high-volume electronic transactions, especially for bulk payments. This includes services like direct benefit transfers, dividend payouts, interest payments, salary credits, and more. It has become a widely used method for recurring transactions such as EMIs, insurance premiums, and utility bill payments.

One of the most significant changes introduced by the RBI is the continuous availability of NACH services, which are now operational every day of the week, including Sundays and bank holidays. Previously, NACH services were only available on working days (Monday to Friday), leading to delays in certain transactions during weekends or holidays. The new rule eliminates this "working day" restriction, allowing for uninterrupted processing of transactions.

Key Benefits of the New NACH Rule:

• Faster Salary Credits: Employees will no longer have to wait for the next working day to receive their salaries if payday falls on a weekend or holiday.
• Timely EMI Payments: Loan EMIs scheduled for deduction on weekends or holidays will now be processed without delay, reducing the risk of late payment fees.
• Quicker Direct Benefit Transfers: Government subsidies, pensions, and other direct benefit transfers will reach beneficiaries faster.
• Seamless Investment Transactions: Mutual fund investments and other financial contributions can now be processed daily, allowing for more flexibility in managing personal finances.

In addition to the NACH rule, the RBI has also revised the charges associated with ATM transactions, particularly the interchange fees that banks charge each other for providing ATM services to customers of other banks.

Revised ATM Interchange Fees:

• Financial Transactions: The interchange fee for financial transactions has been increased from Rs 15 to Rs 17.
• Non-Financial Transactions: The fee for non-financial transactions, such as balance inquiries, has been increased from Rs 5 to Rs 6.

These changes may lead to an increase in ATM usage fees for customers, depending on their bank’s policies. However, most banks provide a certain number of free ATM transactions per month before these charges apply.

Another change introduced concerns the doorstep delivery services provided by India Post Payments Bank (IPPB). Previously free of charge, these services will now be chargeable at Rs 20 plus GST per visit. This includes services like cash withdrawals, deposits, and other banking transactions conducted at the customer’s doorstep.

Implications for Customers:

• Increased Cost for Doorstep Services: Customers who rely on doorstep banking, particularly the elderly or those in remote areas, may see an increase in their banking costs.
• Consideration of Digital Alternatives: With the introduction of these charges, customers may be encouraged to explore digital banking options, which often offer similar services without additional fees.

The RBI has also revised the charges related to cash transactions at bank branches and the issuance of cheque books.

Cash Transaction Charges:

• Home Branch Transactions: Cash transactions are free up to Rs 2 lakhs per account. Beyond this limit, a charge of Rs 5 per Rs 1000 is applicable, with a minimum charge of Rs 150.
• Non-Home Branch Transactions: Cash transactions up to Rs 25,000 are free of charge. Transactions above this limit incur a charge of Rs 5 per Rs 1000, with a minimum charge of Rs 150.

Cheque Book Charges:

• Additional Cheque Books: Customers will be charged Rs 20 for every additional cheque book of 20 leaves after the first 25 leaves in a year, which are provided free of charge.

These changes are part of the broader effort by the RBI to rationalize banking charges and encourage digital transactions.

The new RBI rules are designed to enhance the convenience and efficiency of banking services across India. Here’s a summary of what these changes mean for you:

• Greater Convenience: With NACH services available every day of the week, you can expect faster processing of salaries, EMIs, bill payments, and other recurring transactions.
• Potential Cost Implications: The increase in ATM interchange fees and the introduction of doorstep banking charges may lead to higher costs for certain banking services. Customers should be mindful of these changes and consider digital alternatives where possible.
• Encouragement of Digital Banking: The revised charges for cash transactions and cheque books may encourage more customers to adopt digital banking methods, which are often more cost-effective and convenient.

As India’s leading bank, HDFC Bank is committed to providing customers with cutting-edge banking services that align with the latest RBI guidelines. With HDFC Bank, you can open a Savings Bank Account or Salary Account instantly from the comfort of your home through our InstaAccount feature. Moreover, HDFC Bank offers a comprehensive suite of services, including bill payments, money transfers, and investment options, all accessible digitally.

By choosing HDFC Bank as your banking partner, you can ensure that your finances are managed efficiently and securely, in line with the latest industry standards.

To open an InstaAccount for your salary, click here to get started.

Read more on the 5 simple ways to bank from home with HDFC Bank here. 

​​​​​​​*Terms and conditions apply. The information provided in this article is generic in nature and for informational purposes only. It is not a substitute for specific advice in your own circumstances.