RBI not to impose levy on paper cheque payments

Mumbai, May 4 (UNI) Putting away with the study group recommendation to levy paper based transactions, the Reserve bank of India (RBI)) today decided not to impose charges on paper cheque payments.

The decision is expected to come as a solace to a major chunk of customers, who are yet to get access to electronic based payments.

The central bank had constituted the group to promote the migration from paper based funds movement to electronic funds in view of the surging number of paper cheques in banks.

The study group recommendations, which was intended to 'encourage customers to move to safer and speedier electronic funds transfer', were placed in RBI website to invite public comments.

Had RBI proceeded with the committee's decision to levy charges, sending money through demand drafts, pay orders and cheques could have been much costlier, said senior bankers.

As of now, banks themselves bear the service charges for MICR processing of cheques.

With a view to bring in the electronic payment modes instead of paper transactions, the study committee had also recommended that banks could offer transactions based on electronic clearing services (ECS) free of cost for a period of three years.

However, the RBI had noted the recommendations of the study group as '' purely recommendatory in nature and did not reflect the views of the Central bank''.

UNI