All About NEFT and RTGS

What is NEFT & RTGS ? 



1. National Electronic Funds Transfer (NEFT) It refers to a nationwide system that allows individuals, firms, and companies to electronically transfer funds (money) from one branch of the bank to any individual, firm or company having an account with any other bank branch in the country.NEFT settles transactions in small batches. The settlement of money takes place at a particular period of time. All transactions are held until that time. For example, as per RBI norms, NEFT settlement takes place 11 times a day during the weekdays 9.00 a.m. to 7.00 p.m. and 5 times during Saturdays 9.00 a.m. to 1.00 p.m. According to me, NEFT is the best method to transfer money in the current era,.



  • Features of NEFT: 


(i) For being a part of the NEFT funds transfer network, a bank branch has to be NEFT- enabled.

(i) Not only individuals, firms or companies maintaining accounts with a  bank branch can transfer funds using NEFT but even such individuals, firms or companies who do not have a bank account can also deposit cash at the NEFT-enabled branch with instructions to transfer funds using NEFT.

(iii) Only individuals, firms or companies maintaining accounts with a NEFT-enabled bank branch can receive funds through the NEFT system.

(iv) In case, if anyone has a bank account then there is no limit - either minimum or maximum - on the number of funds that could be transferred using NEFT.

(v)  In case, if anyone does not has a bank account, then the maximum amount that could be transferred is rs.50,000 against cash.



(vi) No charges to be levied for the beneficiaries or receiver of funds.

(vii) Foreign remittances cannot be received through NEFT.

(viii) NEFT settles transactions in batches.


(2) Real Time Gross Settlement (RTGS): It alludes to an asset exchange framework where the exchange of assets happens starting with one bank then onto the next on a 'Continuous' and on 'Net' premise. Settlement 'Progressively' signifies installment exchange isn't exposed to any holding up period. The exchanges are settled when they are prepared. 'Gross' settlement means the transaction is settled one-to-one basis without bunching or netting with any other transaction. Although we can conclude that this is the fastest possible money transfer way through the banking channel.

The RTGS service for customers is available from 9.00 am to 4.30 pm on weekdays and from 9.00 to 1.30 pm on Saturdays as per RBI guidelines.



  • Features of RTGS: 


(i) All the bank branches in India are not RTGS-enabled. Only CBS-enabled bank branches can extend this facility.

(ii) RTGS transactions are processed continuously throughout business hours and not in batches.

(iii) The receiving (beneficiary) bank has to credit the customer's account within two hours of receiving the fund transfer message.      

(iv) The minimum transaction value for RTGS is Rs 2 lakhs. There is no upper ceiling for RTGS transactions.

Difference between RTGS and NEFT

The basic difference between RTGS and NEFT is that while RTGS transactions are processed continuously, NEFT settles transactions in batches. Another difference is that while the minimum transaction value for RTGS is Rs 2 lakhs there is no such minimum value for NEFT.     
     

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