[ecis2016.org] The National Electronic Funds Transfer system enables online money transfers.
National Electronic Funds Transfer is a system administered by the Reserve Bank of India for electronic funds transfers. This setup has been established and maintained by the Institute for Development and Research in Banking Technology since November 2005.
What is NEFT?
The Reserve Bank of India (RBI) operates the National Electronic Funds Transfer (NEFT) system as well as several other electronic payment systems. The goal of NEFT was to establish a secure, efficient, and economical means of electronic fund transfer. Funds can be transferred to the beneficiary account near-real-time, and the transaction will be settled securely. NEFT transactions are not subject to any charges by the RBI.
Features of NEFT
Online money transfers can be made using the National Electronic Funds Transfer system. It is regulated by the Reserve Bank of India (RBI) and is governed by its rules and regulations.
- One-to-one payments can be made using NEFT.
- Transactions using NEFT can only be conducted between banks that support the service.
- It takes a few days for NEFT transactions to complete, implying that transactions are not made in real-time.
- The RBI set a fixed time for NEFT transactions before December 2019. An NEFT transaction will be processed Monday through Friday between 8:00 AM and 6:30 PM and on Saturday between 8:00 AM and 12:00 PM. Beginning in 2020, NEFT transactions can be processed 24 hours a day, seven days a week.
- You must add beneficiaries to your bank’s internet banking portal before transferring funds via NEFT.
- There is no limit to the number of NEFT transactions.
- The fee varies depending on the amount being transferred for all NEFT transactions; the fee ranges from Rs. 2.5 to Rs. 25.
- According to RBI guidelines, NEFT payments are processed and settled in batches of half an hour.
How does NEFT work?
Funds can be transferred easily and conveniently via NEFT. Follow these steps:
- You can access your internet banking account by logging in.
- Go to the main page and click on ‘Fund transfer’.
- Choose ‘NEFT’ from the drop-down menu.
- If you haven’t already done so, you must add a beneficiary to your account’s beneficiary list.
- Adding a new beneficiary is as simple as clicking the ‘Add beneficiary’ button on the page.
- Identify the beneficiary by entering their name, bank account number, IFSC, etc.
- Then click on ‘Confirm’ or ‘Add’.
- To complete this step, you will need to enter the OTP sent to your registered mobile number.
- You will be able to process your action after doing so. Add a beneficiary typically takes 24 hours.
- After adding a beneficiary to your account, you will need to select the beneficiary’s details (to whom you will send the money) from your list of beneficiaries.
- Confirm your transaction by entering the amount you need to transfer.
- The amount will be transferred from your bank account to the other’s after you click ‘Confirm’.
Benefits of NEFT
The following are why you should use NEFT (National Electronic Funds Transfer) over all the other methods of online money transfer:
- NEFT facilitates the transfer of funds by making it convenient, easy, and cost-effective.
- There is no third-party involvement in NEFT transactions; they are all done online.
- The RBI plays an important role in the security and safety of NEFT transactions.
- As soon as the transaction is completed, the receiver and sender are notified immediately.
- When transferring money, NEFT does not require checks or demand drafts; hence, it is cost-effective.
- Individuals, firms, and corporations can all make NEFT transactions. NEFT-enabled banks from both parties are the only requirements.
- NEFT can be used to transfer money and pay your loan instalments, credit card bills, and EMIs.
Charges applicable on NEFT transactions
NEFT transactions involve the following additional charges as money transfer fee-
|Transaction Amount||Fee Amount|
|Less than or equal to Rs. 10,000||Rs. 2.5|
|Between Rs. 10,000 and Rs. 1 Lakh||Rs. 5|
|Between Rs. 1 Lakh and Rs. 2 Lakh||Rs. 15|
|Equal to or more than Rs. 2 Lakh||Rs. 25|
Who is eligible for NEFT transactions?
The NEFT system enables individuals, firms and corporations with accounts with any member bank to transfer funds electronically to any other individual, firm or corporation with an account with any other participating bank in the country.
What is NEFT inward?
- The RBI’s website describes NEFT as a payment system that allows one-to-one fund transfers. With NEFT, you can electronically transfer funds from one bank branch to another. Also, you can use NEFT to make a payment to a firm or corporation with an account at any bank branch in India.
- NEFT can be used to deposit cash if you do not have a bank account. Remittances in cash will be restricted to a maximum of Rs.50,000 per transaction.
- An NEFT system settles fund transfer requests every half an hour. Settlements are made in twenty-three half-hourly batches from 8:00 a.m. to 7:00 p.m. Monday through Friday (except the 2nd and 4th Saturdays of each month).
- NEFT transactions will be received within two business hours by the receiver.
What are the NEFT timings?
NEFT transactions could be made on all days and all times.
How much can I transfer via NEFT?
NEFT transfers can be made in any amount, regardless of the minimum or maximum. NEFT transactions through cash, however, are limited to Rs 50,000.
NEFT transactions take how long to settle?
Settlement of NEFT transactions can be completed within 24 hours. Settlement times for these transactions may vary from bank to bank, however.
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