The covid-19 pandemic is spreading rapidly as cases spike with each passing day. With social distancing becoming the new normal, customers may find it difficult to carry out high-value transactions through the bank’s mobile application or website because banks impose a limit to mitigate risks.
Banks generally put an upper cap on daily fund transfer in order to limit the risk of the customer in case of a wrongful transaction or fraud. However, as per the Reserve Bank of India (RBI) regulations, there is no cap on the amount of money one can transfer through National Electronic Funds Transfer (NEFT) and Real-Time Gross Settlement (RTGS). Immediate Payment Service (IMPS) and Unified Payments Interface (UPI), on the other hand, have a cap of ₹2 lakh and ₹1 lakh, respectively.
Experts said another reason for having a cap could be to lower the bank’s liquidity risk. “RBI has given banks the freedom to set their own upper ceiling on NEFT and RTGS transactions based on their risk and liquidity management. Banks have placed certain special upper limits on their NEFT transactions applicable on RTGS holidays and off-business hours since the introduction of 24/7 NEFT facility,” said Sahil Arora, director at Paisabazaar.com.
State Bank of India, for example, has a cap of ₹10 lakh on RTGS transactions whereas HDFC Bank has a ₹25 lakh upper limit. Kotak Mahindra Bank has a per-beneficiary cap of ₹5 lakh and a per-day transaction limit of ₹10 lakh for NEFT transactions.
“Our retail customers can transfer up to a maximum of ₹20 lakh in a day using both mobile and internet banking channels via RTGS, NEFT, IMPS and UPI,” said Jithesh P V, deputy vice-president and head digital, Federal Bank.
“We have set a daily upper cap limit of ₹10 lakh for our retail mobile banking application; FedMobile and our customers can do payments or transfers, including NEFTs up to this limit on a daily basis. This limit is based on an analysis of transaction data and the risk policies of the bank,” he said.
Adhil Shetty, CEO of BankBazaar said the limits vary depending on the customer segment, the tool used for the transaction and the channel. “Some banks allow customers to transfer as much as ₹25 lakh while others restrict it to ₹10 lakh. For instance, one bank limits the maximum amount of funds that can be transferred via online NEFT transfer to ₹2 lakh, but allows multiple transactions for a total value of ₹25 lakh or the third-party transfer limit chosen by the customer,” he said.
Further, banks also give customers the choice to put a cap on the transaction limit, which is useful in case the customer wants to have a lower cap in order to eliminate risks.
For example, Federal Bank offers retail customers three net banking limit options to choose from. The customer has a basic limit of ₹30,000 when they log in and have three kinds of limits— ₹1 lakh, ₹5 lakh, and ₹10 lakh for fund transfer. Beyond the set limits, most banks require customers to visit the branch to make the transaction.
“A retail customer can transfer up to a maximum of ₹20 lakh in a day using both mobile and internet banking channels such as RTGS, NEFT, IMPS and UPI. Customers can always use the branch channel for transferring money beyond this limit. However, in our corporate net banking channel, corporate clients can set their required limit without any restrictions,” said Jithesh.
First Published:
10 Sep 2020, 10:53 AM IST
FAQs
The covid-19 pandemic is spreading rapidly as cases spike with each passing day. With social distancing becoming the new normal, customers may find it difficult to carry out high-value transactions through the bank's mobile application or website because banks impose a limit to mitigate risks.
Why do people need to visit a bank? ›
People trust banks because they are government-accredited institutions. Your bank has licenses and safeguards to protect your money, should you choose to hold it there. You can go there in person at any time to take out cash from an ATM, open a savings account, or dispute a charge on your account.
Why do people go to bank branches? ›
After all, when dealing with in-depth processes like mortgage applications or financial planning, you'll receive more personalized advice and support from a face-to-face meeting than an online chatbot. Plus, there are still functions that only a branch can handle.
Do banks care about your transactions? ›
Yes, a bank can see all transactions occurring in your accounts. This allows them to provide account balances, statements, fraud monitoring, and other services.
How do you know if a bank transaction is successful? ›
After authenticating the payment, the transaction status will be displayed. In case you are unable to see the status, you can access it by following these steps: Go to Transaction history. Click on the Transaction card to access the Transaction Details page, where the failure reason and transaction flow is provided.
Why would someone need to visit a financial institution branch? ›
If you need a substantial amount of money right away, you may have to work with a teller. Similarly, if you need to pay for something using certain types of cleared funds – like a money order – you should work directly with a bank officer. The process may be faster and easier than it would be online.
Do people still go to the bank? ›
When asked why they visit their banks, 40% of respondents said they preferred to cash or deposit checks in person. About 46% of people ages 18 to 24 held this preference, and 43% of those 65 and over like to do their checking business in person. About 38% of respondents preferred making large cash deposits in person.
Are bank branches still necessary? ›
Bank visits may be on the decline, but they still matter, and business success involves adapting to the digital age without discarding the advantages held by brick and mortar locations.
How much amount should be there in a bank account? ›
Reserve 20% of your income for savings, including contributing to retirement funds and building an emergency fund. This ensures you are prepared for unexpected expenses and can work towards your long-term financial goals.
What are the disadvantages of branch banking? ›
Disadvantages of Branch Banking:
- Difficulties of Management. Supervision and Control.
- Lack of Initiative.
- Monopolistic Tendencies.
- Regional Imbalances.
- Continuance of Non-profitable Branches.
- Unnecessary Competition.
- Expensiveness.
- Losses by Some Branches Affect Others.
All federally-regulated banks are required by law to report major money transactions to the Financial Crimes Enforcement Network, or FinCEN, which is a bureau of the U.S. Department of the Treasury.
Can bank tellers see all your accounts? ›
Can bank employees see your accounts? Bank tellers can see your checking and savings accounts as well as money paid toward loans. They can also move money around your different accounts at your request.
Can a bank ask where you got money? ›
However, according to GlobalBanks, tellers can question deposits under this amount because “it is the responsibility of each bank to understand the origin of funds being deposited by customers.” Still, the site states that tellers are unlikely to ask where the money for a deposit came from if they have no reason to ...
Who can see my bank transactions? ›
No one can check your bank statement without your permission. Unless you give out your account number, banks do not release information regarding your bank statement to unknown third parties without your consent.
How can you tell if a bank is trustworthy? ›
Identifying FDIC-insured banks
- Use the FDIC tool to search for your bank.
- Call the FDIC at 877-275-3342.
- Ask your banker about their FDIC coverage.
- Look for an FDIC sign at your local branch.
Banks must report your deposit to the federal government if it's more than $10,000 to alert the federal government to monitor for potential financial crime.
Why would you need to go to the bank? ›
Most banks have advisors on staff who can help you with your finances, especially around crucial times, like buying a home, retirement or trying to come up with a plan to pay off debt. If you take out a loan, you'll most likely have to meet with a bank advisor to finalize the process.
Why do people go into a bank? ›
They act as safe stores of wealth for savers and as predictable sources of loans for borrowers. In this way, the major business of banks is that of a financial intermediary between savers and borrowers.
Why might someone go to the bank? ›
Mainly People go bank for withdrawal or deposit of cash from their account Or for deposit of cheque or for taking a loan or for operating their locker or for getting various miscellaneous services form bank .
Why would a bank visit a business? ›
Although businesses don't have credit scores, your company's credit history and reputation help determine its creditworthiness. Banks evaluate your company's debt repayment history, your business references, the quality of your product or service, and whether you have a good reputation.
