What changed
RBI observed banks were value-dating credits to dodge penal interest on delayed NEFT transactions, violating earlier instructions. Banks are now directed to stop this practice and pay penal interest automatically without customer claims. Additionally, banks must ensure CFC contact details are updated and responsive, with immediate reporting to RBI and board oversight.
What it means for you
Banks face stricter scrutiny on NEFT customer service. They must proactively compensate customers for delays, increasing operational costs and compliance burden. Non-functional CFCs will attract regulatory action, pushing banks to invest in dedicated resources. Board-level accountability ensures top management is directly responsible for adherence.
What you must do
- Immediately stop value-dating to avoid penal interest; pay penalty suo-moto at LAF Repo Rate plus 2% for delayed NEFT credits/refunds.
- Update and verify CFC contact details on bank website and report changes to RBI's National Clearing Cell promptly.
- Ensure CFC calls/emails are attended promptly with adequate staffing; submit compliance to board and RBI after next board meeting.
- Report current adherence status and penalty payment mechanism to RBI, with board note and resolution on minimizing future incidents.
Who it affects
All member banks participating in NEFT, Customer Facilitation Centres (CFCs) handling NEFT queries, Bank boards and senior management responsible for compliance
What is the penal interest rate for delayed NEFT credits?
Banks must pay penal interest at the current RBI LAF Repo Rate plus two percent for the period of delay or until refund, as applicable.
Do banks have to wait for customer complaints to pay penalty?
No, RBI mandates that banks pay penal interest suo-moto, meaning automatically without waiting for a claim from the customer.
What happens if CFC contact details are outdated?
RBI views this seriously as it defeats customer service purpose. Banks must keep details updated and report changes to RBI's National Clearing Cell immediately.