RTGS AND NEFT
Presented By: Sandhya
152 Rohit 139
Varun Nagpal
185 Varun Samtani
186
Inter Bank Transfer
Inter bank transfer is a special service that allows you to transfer funds electronically to accounts in other banks in india through :
NEFT RTGS
NEFT
NEFT refers to National Electronic Funds
Transfer. It is an online system for transferring funds from one financial institution to another within India (usually banks). The system was launched in November 2005, and was set to inherit every bank that was assigned to the SEFT clearing system. It was made mandatory by the RBI for all banks on the SEFT system to migrate to NEFT by mid December 2005. As such, SEFT was discontinued as of January 2006. The RBI welcomed banks that were full members of the RTGS to join the NEFT system
RTGS
RTGS is an acronym that stands for Real Time Gross
Settlement. RTGS is a funds transfer system where money is moved from one bank to another in real-time, and on gross basis. When using the banking method, RTGS is the fastest possible way to transfer money. Real-time means that the payment transaction isnt subject to any waiting period. The transaction will be completed as soon as the processing is done, and gross settlement means that the money transfer is completed on a one to one basis without clustering with another transaction. The transaction is treated as final and irrevocable as the money transfer occurs in the books of the RBI (Reserve Bank of India). This system is maintained by the RBI, and is available during working days for a given number of hours. Banks using RTGS need to have Core banking to be able to initiate RTGS transactions.
RETAIL INTERNET BANKING
MINIMUM MAXIMUM
RTGS
RS. 1 LAKH
RS. 1 LAKH
NEFT
NO LIMIT
RS.1 LAKH
CORPORATE INTERNET BANKING
MINIMUM MAXIMUM
RTGS
RS. 1 LAKH
NO LIMIT
NEFT
NO LIMIT
NO LIMIT
INTERNET BANKING HOURS RTGS
DAYS START TIME END TIME
MON-FRI
9:00 HOURS
16:00 HOURS
SAT
9:00 HOURS
12:00 HOURS
NEFT
DAYS START TIME END TIME
MON- FRI
8:00 HOURS
16:00 HOURS
SAT
8:00 HOURS
11:30 HOURS
Difference
RTGS NEFT
RTGS is based on gross settlement. Gross settlement is where a transaction is completed on a one-to-one basis without bunching with other transaction. RTGS transactions are processed throughout the working hours of the system. RTGS transactions involve large amounts of cash, basically only funds above Rs 100,000 may be transferred using this system
NEAs for a Deferred Net Basis (DNS), or net-settlement, this is where transactions are completed in batches at specific times. Here, all transfers will be held up until a specific time.
For NEFT, any amount below Rs 100,000 may be transferred, and this system is generally for smaller value transactions involving smaller amounts of money
RTGS processes in real-time (push transfer)
while NEFT processes in cycles during the given working day. This causes a NEFT transaction that is initiated later than the last cycle to be completed the next day while NEFT is on a Deferred Net Basis, where transfers are bundled and deferred for a specific time.
RTGS completes transactions in real-time, and is therefore faster than NEFT, which completes transactions in cycles RTGS is gross settlement, where a transfer is completed on a one-to-one basis
RTGS is a high value transfer system, handling funds worth Rs 100,000 and above
while NEFT transfers smaller amounts below Rs 100,000.
Majority of the commercial banks have employed
RTGS and it is available in over 30472 numbers of branches while the count of banks which have purchased the software required to facilitate NEFT based transaction are over 89 and NEFT facility is available at approximately 32407 branches of banks in India. These branches may be available in remote corner of country also.
Hence, RTGS and NEFT though distinct in their functionality and process, are unique and similar in their ultimate service which is now rendering plethora of advantages making the easiest service available in service sector industry across globe. In RTGS the beneficiary bank credits the beneficiarys account in a span of two hours post the receipt of funds transfer message. RTGS transactions are processed throughout the working hours of the system. Marking its difference yet again NEFT is done on net basis where the bank clubs transactions together and only the net amount is transferred. This settlement usually takes place 7 times a day on weekdays and 3 times on Saturdays. NEFT takes place within the same day if it is within the cut-off time and the next working day if it is beyond the prescribed cut-off time.
Another significant factor that differentiates RTGS and NEFT is fixing a floor limit. RTGS is an exclusive message based transfer mechanism for an amount over Rs 2 lakhs i.e the minimum amount to be remitted through RTGS is Rs.2 lakhs. There is no upper ceiling for RTGS transactions. Contrary to that, NEFT is used mainly to transfer funds below Rs 2 lakhs, and this system is most commonly used for smaller value transactions involving smaller sum of money i.e from an amount as minute as one rupee. However, there is no maximum limit for transfers through NEFT.
THANK YOU