Payment systems like NEFT and RTGS to be closed on April 1: RBI

Transactions (or online fund transfers) initiated tomorrow will only be reflected on April 3, which is Monday.

Sighting a change from its earlier directive, in a recent circular, the Reserve Bank of India (RBI) said that all payment systems will remain closed on April 1.

Earlier, on March 25, the RBI had released a directive saying payment systems will remain open on all days from March 25 to April 1, 2017. It stated,

“With a view to facilitate accounting of all the government transactions for the current financial year (2016-17) by March 31, 2017, it has been decided that all payment systems, including RTGS (Real Time Gross Settlement) and NEFT (National Electronic Funds Transfer) would operate, as on a normal working day, during the period March 25 to April 1, 2017 (including Saturday, Sunday and all holidays).”

This current circular means that electronic fund transfer channels like RTGS and NEFT will remain closed on Saturday, with no effect on general debit and credit card transactions.

A separate broadcast message will also be issued through the respective system to the member banks in this regard, according to the circular.

On 23 March, the RBI had instructed banks about conducting special clearing exclusively for government transactions on March 30-31. The directive stated, “With a view to facilitate accounting of all the government transactions for the current financial year (2016-17) by March 31, 2017, it has been decided to conduct special clearing at all clearing houses across the country on March 30 and 31, 2017.”

Further, the notification made it mandatory for banks to participate in the special clearing operations. It stated,

“It is mandatory for all banks to participate in the special clearing operations on these two days. All member banks of the Clearing House are required to keep their inward clearing processing infrastructure open during the Special Clearing hours and maintain sufficient balance in their clearing settlement account to meet settlement obligations arising out of the Special Clearing. However, participation in the outward clearing is left to banks depending upon the instruments received by them towards credit-to/payment-from Government accounts.”

It further went on to advise banks to "participate in the Centralised Payment Systems (RTGS and NEFT) on these days."

Further, the closing of banks on the first day of fiscal year is routine, since it's an annual closing day of accounts for banks.