Presentation on NEFT system
Subject – Financial Market and
Banking Operation
Presented by,
VARSHA [Link]
DEFINATION OF National Electronic Fund
Transfer (NEFT)
National Electronic Fund Transfer is one of the most
prominent electronic fund transfer systems of India.
NEFT was introduced in November 2005, and it is a
facility provided to bank customers to enable them to
transfer funds quickly and securely to one account to
another account.
It is a nationwide payment system facilitating safe and
secure transaction all over the country. In this article,
we view the various aspects of NEFT in detail.
CONTENT’S OF NEFT SYSTEM
Lower cost of transaction of RTGS/NEFT as compared
to cost of transaction and remmitance through draft.
Draft Issue to Payment – long process, cancellation,
duplicate draft issue, revalidation, IOR issues, frauds,
Staff accountability.
Customer Benefit – Immediate credit.
Low transaction time, no printing, shorten the queues.
Drafts will be phased out in the coming years.
PROCESS of NEFT’S
The NEFT process consists of following steps are listed out
below:
Request for NEFT by bank customer Data Entry at the Sending
Bank Branch.
Processing or Data Upload at Sending NEFT Service Centre.
Transmission or submission of NEFT message to the NEFT
centre.
Processing and transmission of NEFT message to the
beneficiary banks. Data validation at receiving NEFT Service
Centre.
Payment to the beneficiary.
Advantages of NEFT’S
• The benefits of NEFT given to the consumers are as follows:
Safe and Effective – For a flawless transfer of funds on the Internet, NEFT
helps you to transfer any amount of money quickly.
Low Processing Charges– NEFT is flexible payment options which are
very economical. To utilise this facility, you don’t have to pay a huge sum of
money to your bank. The processing charges are economical, and you can
transfer any amount of money without any difficulty.
Highly Dependable–NEFT, an integral aspect of Internet banking, is a
highly dependable method of making payments and receiving funds online.
In India, most of the banks are regulated under the norms set by RBI and,
hence, the Internet banking facility too is quite safe.
Rapid Settlement–Unlike the regular banking methods of fund transfer,
NEFT transfer is really quick, and you can enjoy rapid settlement of
accounts, thereby improving the overall functionality of your business.
NEFT System Transaction Procedure
Step 1: Firstly, the remitter has to provide the requisite
information like
• Beneficiary’s Name.
• Beneficiary’s Account number
• Beneficiary’s Account type ( cash credit, loan account, etc.)
• Bank name, location & base branch in which the beneficiary
account is held.
• IFSC code of beneficiary bank etc. to start the process of
NEFT
Step 2: The bank branch at which the fund transfer request
originated, prepares a message and sends it to its pooling
centre (also called the NEFT Service Centre)
Step 3: The pooling centre forwards the message to the NEFT Clearing
Centre (operated by the National Clearing Cell, RBI, Mumbai) to be
included in the next available batch.
Step 4: The RBI at the clearing centre sorts the transaction bank-wise and
prepares to account entries to receive funds from(debit) the originating
banks and give the funds to (credit) the destination banks. Therefore,
bank-wise remittance messages are forwarded to the destination banks
through their polling centre (the NEFT Service Centre).
Step 5: The destination banks receive the remittance messages from the
Clearing Centre and pass on the credit to the beneficiary accounts.
Information Required for
Remittance
• The required information that the remitting customer would
have to furnish at the time of remittance through NEFT are as
follows:
• Original cancelled cheque leaf (with pre-printed account
holder name, account number and IFSC code) / if cheque leaf
is not personalised, please provide the copy of latest bank
statement (original) or bank attested statement/passbook).
• IFSC code (11 digit character code appearing on your cheque
leaf. If you do not find this on your cheque leaf, then please
consult your bank).
THANK YOU!!
