NEFT
From WikiRuz
National Electronic Funds Transfer (NEFT) System is a nation wide funds transfer system to facilitate transfer of funds from any bank branch to any other bank branch.
- As on December 29, 2007, 34510 branches of 82 banks are participating.
- mainly to send small value payments at nominal cost.
What is the difference between the current EFT, RTGS and the new NEFT?
- The RBI-EFT system is confined to the 15 centres where RBI is providing the facility
- there is no such restriction in NEFT as it is based on the centralised concept. The NEFT system also uses the state-of-the-art technology for the communication, security etc, and thereby offers better customer service.
- RTGS works on Gross settlement where as NEFT is an electronic payment system to transfer funds from any part of country to any other part of the country and works on Net settlement
What details does the remitting customer would have to furnish for the remittance?
The essential information that the remitting customer has to furnish:
- Beneficiary details such as beneficiary name and account number
- Name and IFSC of the beneficiary bank branch.
How does the NEFT system work?
Step 1: NEFT Application form
The remitter fills in the NEFT Application form giving the particulars of
- the beneficiary
- bank-branch
- beneficiary's name
- account type and
- account number
and authorises the branch to remit the specified amount to the beneficiary by raising a debit to the remitter's account.
(This can also be done by using net banking services offered by some of the banks.)
Step 2: Structured Financial Messaging Solution (SFMS)
The remitting branch prepares a Structured Financial Messaging Solution (SFMS) message and sends it to its Service Centre for NEFT.
Step 3: RBI (National Clearing Cell, Mumbai)
The Service Centre forwards the same to the local RBI (National Clearing Cell, Mumbai) to be included for the next available settlement.
Step 4: Sorting the transactions
The RBI at the clearing centre sorts the transactions bank-wise and prepares accounting entries of net debit or credit for passing on to the banks participating in the system. Thereafter, bank-wise remittance messages are transmitted to banks.
Step 6: Processing the remittance messages
The receiving banks process the remittance messages received from RBI and effect the credit to the beneficiaries' accounts.
What is the schedule of NEFT transactions settlement?
Presently, NEFT is settled in six batches on weekdays at
- 0930
- 1030
- 1200
- 1300
- 1500
- 1600
Three batches on Saturdays at
- 0930
- 1030
- 1200
What is the limit on the number of individual transactions?
There is no value limit for individual transactions.
Is it necessary to have a bank account to originate the NEFT transaction?
Yes, NEFT is an account to account funds transfer system.
Is it necessary to have a bank account to originate the NEFT transaction?
Yes, NEFT is an account to account funds transfer system.
Is it necessary that the beneficiary should have an account at the destination bank-branch?
Yes, NEFT is an account to account funds transfer system.
Can I receive or send foreign remittances through NEFT?
No, This system can be used only for remitting Indian Rupee among the participating banks within the country.
Can I send/receive funds from/to NRI accounts?
Yes, subject to applicability of provisions of FEMA
Would the customer receive an acknowledgement of money credited to the beneficiary?
No, however electronic acknowledgement is generated for the customer that his money is received by the beneficiary at the sender branch.
Would the remitting customer get back the money if it is not credited to the beneficiary’s account?
Yes, the remitting customer gets back the money if it is not credited to the beneficiary account.
Related Links for Banking in India
- Non-Banking Financial Company
- Electronic Fund Transfer
- NEFT
- Automated Teller Machine
- Real Time Gross Settlement (RTGS)
- EFT
- IFSC Code
- MICR Number
- Parts of a cheque
- Making a Debit Card Payment
- Making a Credit Card Payment
