National Electronic Fund Transfer (NEFT)
• National Electronic Funds Transfer (NEFT) is a nation-wide
payment system facilitating one-to-one funds transfer.
• Under this Scheme, individuals, firms and corporate can
electronically transfer funds from any bank branch to any
individual, firm or corporate having an account with any other
bank branch in the country participating in the Scheme.
• Even such individuals who do not have a bank account (walk-in
customers) can also deposit cash at the NEFT-enabled branches.
• There is no limit – either minimum or maximum – on the
amount of funds that could be transferred using NEFT. However,
maximum amount per transaction is limited to Rs.50,000/- for
cash-based remittances within India and also for remittances to
Nepal under the Indo-Nepal Remittance Facility Scheme.
• Presently, NEFT operates in hourly batches – there are twelve
settlements from 8 am to 7 pm on week days (Monday through
Friday) and six settlements from 8 am to 1 pm on Saturdays.
Real Time Gross Settlement (RTGS)
• The acronym ‘RTGS’ stands for Real Time Gross Settlement,
which can be defined as the continuous (real-time) settlement of
funds transfers individually on an order by order basis (without
netting). ‘Real Time’ means the processing of instructions at the
time they are received rather than at some later time; ‘Gross
Settlement’ means the settlement of funds transfer instructions
occurs individually (on an instruction by instruction basis).
• Considering that the funds settlement takes place in the books of
the Reserve Bank of India, the payments are final and
irrevocable.
• The RTGS system is primarily meant for large value transactions.
The minimum amount to be remitted through RTGS is 2 lakhs.
There is no upper ceiling for RTGS transactions.
• The remitting bank receives a message from the Reserve Bank
that money has been credited to the receiving bank. Based on this
the remitting bank can advise the remitting customer through
SMS that money has been credited to the receiving bank.
• The RTGS service window for customer’s transactions is
available to banks from 9.00 hours to 16.30 hours on week days
and from 9.00 hours to 14:00 hours on Saturdays for settlement
at the RBI end. However, the timings that the banks follow may
vary depending on the customer timings of the bank branches.
NEFT and RTGS Inter Bank Transfer is a special service that allows an
individual to transfer funds electronically to accounts in other banks in
India through the following two modes: 1. NEFT 2. RTGS NEFT
(National Electronic Funds Transfer) The “NEFT” stands for National
Electronic Funds Transfer. NEFT is one of the most prominent
electronic fund transfer system of India. It is the facility provided to
bank customers to enable them to transfer funds easily and securely on
one-to-one basis. It means it is an online system for transferring funds
from one financial institution to another within India usually the banks.
National Electronic Funds Transfer (NEFT) is introduced by the
Reserve Bank of India (RBI) in November 2005. Who can transfer
funds using NEFT? Individuals, firms and corporates maintaining
accounts with any bank can transfer funds using NEFT system. Who
can receive funds using NEFT? Individuals, firms and corporates
maintaining accounts with any bank can receive funds using NEFT
system. It is therefore, necessary for the beneficiary to have an account
with the NEFT enabled destination bank branch in the country.
Operating hours of NEFT The NEFT system is available on all days,
i.e., on 24x7x365 basis. NEFT presently operates in batches on half-
hourly intervals throughout the day. In case of non-availability of NEFT
for any reason, appropriate message will be broadcasted by RBI to all
system participants. Key Features of NEFT • No Limit for a maximum
and minimum amount. • Offered by branches of all domestic banks. •
Offered on bank working days between 8 am to 6:30 pm from Monday
to Friday and 8 am to 1 pm on working Saturdays. Advantages of NEFT
• It is economical to use NEFT for money transfer. • NEFT is built on
a secure platform. • No need of using a cheque or demand draft for
money transfer. • Transferring money does not require you to visit the
bank. • Initiate funds transfer online. RTGS(Real Time Gross
Settlement) The “RTGS” Stands For ‘Real Time Gross Settlement’. It
is an electronic payment system managed by Reserve Bank of India
that allows the interbank transfer of funds on a real-time and on gross
settlement basis. ‘Real-time’: It means that the payment transaction is
not subjected to any waiting period. The transaction will be completed
as soon as the processing is done. Gross settlement: It means the money
transfer is completed on a one to one basis without clustering with
another transaction. Key Features • Real-Time, within a few minutes.
• Minimum limit of Rs. 2,00,000. • It can be offered only by RTGS
enabled branches. • Offered on bank working days between 8 am to 4
pm. Monday to Friday and working Saturdays.