ICICI Bank stopped EFT other banks may follow suit

The Reserve Bank of India issued a circular dated January 8 on discontinuation of Electronic Funds Transfer (EFT) a possible misinterpretation of the circular, as a result ICICI bank asked its customers to switch over to other modes of payments.

In case you have given instructions to your bank for payments through Electronic Funds Transfer (EFT), it is better to check the status. From February 1, ICICI Bank has already stopped EFT and there could be other banks following suit.

A message to this effect on the bank’s portal created confusion among a large number of customers as sudden stoppage of payments could mean serious trouble.

“The RBI circular, addressed to all member banks of Brihan Mumbai bankers’ clearing house, says that the EFT system for transfer of funds to customers could be used up to January 31. “We acted on this,” an ICICI official told Business Line from Mumbai.

On the other hand, there is no clarity among the ICICI officials whether the RBI’s directive is applicable to non-Mumbai centers also. The directive issued by the bank also did not indicate withdrawal of EFT from February 1 in categorical terms.

When contacted the second largest private sector bank HDFC Bank official in Mumbai denied receiving any circular on EFT. The official explained a sudden stoppage of EFT will cause problem to a customer as some banks are still not part of National Electronic Funds Transfer (NEFT), though RBI wants to promote it in place of EFT.

Whereas RBI spokesperson said EFT is “very much in use.”