The financial system in India has moved several steps ahead of what it was two decades back. The power of the internet has totally transformed the banking system in the country. Electronic fund transfer was launched as a convenient source for sending and receiving money. The Reserve Bank of India is the chief governing body which introduced two efficient schemes that have now gained extreme popularity- NEFT and RTGS. Let us find out what is NEFT transfer.
National Electronic Funds Transfer (NEFT) is regarded as a convenient method of sending money to other bank accounts. Various individuals, firms and corporates have benefitted by using this particular fund transfer system under internet banking without the need for physically visiting the bank.
What is NEFT transfer?
NEFT stands for National Electronic Funds Transfer. This is a nation-wide payment system maintained by RBI which facilitates one to one fund transfer. NEFT operates on a Deferred Net Settlement basis under which funds are transferred in half-hourly batches. In order to transfer money using NEFT, both the bank branches should be NEFT-enabled. To check whether your bank branch is NEFT-enabled, you can call the customer service of your bank.
How to send money using NEFT?
You should follow the procedure given below to send money using NEFT. You must have registered for your bank’s internet banking facility to be able to do so.
- Log in to your internet banking portal using your Customer ID and Password.
- Go to the Fund Transfer section and select NEFT.
- You will be required to add beneficiary first. Enter the name, account number, IFS Code and branch name of the beneficiary’s bank account.
- Once the beneficiary is successfully added, you can transfer fund by entering the amount you want to send.
- Select the account from which you wish to send the amount.
- Click on ‘confirm’.
What is NEFT Transfer Operation Procedure?
Let us find out what is the NEFT transfer process:
- The NEFT process starts when a remitter sends funds to the beneficiary’s account.
- When an NEFT request is generated, the originating bank branch creates a message and sends it to its pooling centre, called as NEFT Service Centre.
- From the pooling centre, the message is forwarded to the NEFT Clearing Centre which is operated by National Clearing Cell, Reserve Bank of India.
- At the Clearing Centre, the sorting is done for money transfer transactions destination bank-wise and accounting entries are done to receive funds from the remitter’s bank (debit) and provide the funds to the destination bank (credit). Later, remittance messages (bank-wise) are offered to the destination banks through their respective pooling centre (NEFT Service Centre).
- The destination banks are served with inward remittance messages from the Clearing Centre and carry forward the credit to the beneficiary customers’ accounts.
NEFT scheme is extremely successful for online transactions since it saves a lot of time for the customer. Everything is processed over the internet under a designated time frame which has been formulated by the Reserve Bank of India.
What is NEFT Transfer Timing?
NEFT transfers can be done on a round-the-clock basis i.e. 24×7, for 365 days. Usually, the average time for successful NEFT transfer is within a period of 30 minutes. However, there are chances that the time can even stretch to 2-3 hours or might be completed in just 10 minutes.
- The system will be available on all days of the year, including holidays.
- NEFT transactions after usual banking hours of banks are expected to be automated transactions initiated using ‘Straight Through Processing (STP)’ modes by the banks.
Apart from the regular questions such as “What is NEFT transfer?” or “How does NEFT function”, here are some common queries answered.
Are all bank branches in India part of the NEFT funds transfer system?
It is important to note that for NEFT funds transfer a branch has to be NEFT- enabled. In order to know which bank branch is part of the scheme, you can simply check the Reserve Bank of India website for gaining information or call on your bank’s customer service number.
Who can transfer money using NEFT?
It is already known that individuals, firms or corporates managing accounts with a bank branch can easily transfer funds using NEFT. However, individuals who do not possess a bank account (walk-in customers) can certainly deposit cash at the NEFT-enabled branches providing instructions to transfer than amount using NEFT. But it is crucial to remember that, for such customers, the cash remittances will be limited to a maximum of Rs.50,000 per transaction. Moreover, these customers need to offer full details including complete address, telephone number etc.
Is there any limit on the fund which could be transferred using NEFT?
The answer to this question is NO. In India, there is no limit (either minimum or maximum) on the total fund’s amount that could be transferred using NEFT. However, for cash-based settlements, the amount per transaction is limited to Rs.50,000 within India, along with remittances made to Nepal falling under the Indo-Nepal Remittance Facility Scheme.
What are the different transactions be initiated using NEFT?
Not only personal funds transfer, but this capable NEFT system can also be utilized for a variety of transaction such as payment of credit card dues, payment of loan EMI, etc.