Central bank abolishes free Interbank money transfer facility

According to the SBP, For transactions above the aggregate limit of Rs25,000 per account in a month, banks may charge individual customers, a transaction fee of no more than 0.1% of the transaction amount or Rs200, whichever is lower.

“This will enable service providers to recover part of their costs and help them in building sustainable innovative business models,” said SBP in a Tweet.

According to the SBP, the limit for free interbank funds transfer will be Rs 25,000 per month.

The new instructions allow banks and other service providers to charge a minimal fee on high-value transactions while protecting and encouraging the low-income segments of the population to continue using digital transactions free of cost.

However, banks may choose to set this aggregate limit at a higher amount as well. This would allow individual customers to make as many free fund transfer transactions remaining within their aggregate monthly limit of free transfers.

After the emergence of Covid in the first quarter of 2020, the State Bank took several measures to cope with the extraordinary situation and advised banks and other service providers to offer free of cost Inter Bank Fund Transfer (IBFT) services to all their customers regardless of the size of the transaction.

The SBP has also advised banks that all digital fund transfer transactions between different accounts within the same bank (intrabank fund transfers) shall remain free.

Further, incoming interbank fund transfer transactions shall also remain free. SBP has further directed banks to ensure proper disclosure of charged and free IBFT amounts along with applicable fees to their customers by sending regular notifications through SMS, apps and email.

After every digital transaction, banks are required to send free of charge SMS to their customers on their registered mobile numbers intimating them about the transaction amount and the charges being recovered.