The Reserve Bank of India (RBI) has announced the National Automated Clearing House (NACH) system will be available on all days, including Sundays and bank holidays, from August 1. RBI Governor Shaktikanta Das said this during the MPC announcement on the central bank's policy on June 4.
The central bank said anything from dividend, interest, salary, pension, to payments on electricity, gas, telephone, water, periodic instalments towards loans, investments in mutual funds, insurance premium, etc, can take place even on bank holidays.
This is a significant step since auto-debit instructions by the account user are not processed on gazetted holidays, bank holidays and Sundays so far. Salaries are also not credited on these holidays.
Under the new rule, people will now have to maintain an appropriate balance in their accounts on the day of debit even if it is a holiday or Sunday to avoid a financial penalty for a low balance. So far, even if you could not maintain an appropriate balance on such days and credited your account on the next day, there was no financial penalty payable by you.
"NACH, a bulk payment system operated by NPCI, has emerged as a popular and prominent digital mode of direct benefit transfer (DBT) to a large number of beneficiaries. This has helped the transfer of government subsidies during the present COVID-19 in a timely and transparent manner," the RBI statement said.
NACH is currently available only on the days when banks are functional. "In the interest of customer convenience, and to take advantage of the availability of RTGS on all days of the year, it is proposed to make available NACH on all days of the week throughout the year, effective August 1, 2021," the statement added. Earlier, the RBI had made electronic fund transfers such as NEFT and RTGS available round the clock as part of the digitisation campaign of the government.
RBI Governor Das, during his MPC meet announcements on Friday, said that repo rate will be kept unchanged at 4 per cent. Reverse repo rate has also been kept unchanged at 3.5 per cent. RBI also stuck to its "accommodative" stance on account of the uncertainty amid the second wave of coronavirus.
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