National Electronic Fund Transfer is one of the most prominent electronic fund transfer systems of India. NEFT was introduced in November 2005, and it is a facility provided to bank customers to enable them to transfer funds quickly and securely to one account to another account. It is a nationwide payment system facilitating safe and secure transaction all over the country.NEFT, or National Electronic Funds Transfer, is a fund transfer mechanism started by the RBI in 2005. It settles transactions in half-hourly batches. Organisations, companies and individuals can use it to transfer funds from one bank account to another. It is available 24/7 throughout the year. NEFT enjoys pan-India coverage.
You can do an NEFT transaction from the comfort of your home. There is no compulsion to visit your nearest bank branch for an NEFT process.
NEFT
Under NEFT, funds are transferred using RBI’s (Reserve Bank of India)NEFT service to the credit account with the other participating. RBI works as the service provider and transfers the credit to the other bank’s account. NEFT operates on a deferred net settlement (DNS) basis which settles transactions in batches. In DNS, the settlement or transactions happens only at a particular point of time.
NEFT Process
- Request for NEFT by bank customer Data Entry at the Sending Bank Branch.
- Processing or Data Upload at Sending NEFT Service Centre.
- Transmission or submission of NEFT message to the NEFT centre.
- Processing and transmission of NEFT message to the beneficiary banks. Data validation at receiving NEFT Service Centre.
- Payment to the beneficiary.
Information Required for Remittance
The required information that the remitting customer would have to furnish at the time of remittance through NEFT are as follows:
- Original cancelled cheque leaf (with pre-printed account holder name, account number and IFSC code) / if cheque leaf is not personalised, please provide the copy of latest bank statement (original) or bank attested statement/passbook).
- IFSC code (11 digit character code appearing on your cheque leaf. If you do not find this on your cheque leaf, then please consult your bank).
NEFT Service Availability Durations
NEFT transactions will be forwarded to RBI based on the following schedule:
| Day | Start Time | End Time |
| Monday to Friday | 8:00 am | 4:00 pm |
| Saturday | 8:00 am | 11:30 am |
Note: The NEFT transactions will have slight variations in the transaction processing time depending upon the various ban
NEFT Timings
You can do a NEFT transaction 24/7 throughout the year. The transactions are settled in batches at half-hourly intervals.
NEFT Charges
RBI has capped the fees that banks can charge customers for NEFT transactions. The following are the maximum charges that can be levied for NEFT:
Transaction Value | Maximum Fees |
Up to Rs. 10,000 | Rs. 2.50 + GST |
Rs. 10,000-1,00,000 | Rs. 5 + GST |
Rs. 1,00,000-2,00,000 | Rs. 15 + GST |
Over Rs. 2,00,000 | Rs. 25 + GST |
NEFT Limit Per Day
The RBI has not placed any limits on NEFT transactions. However, an individual bank may set up an NEFT transfer limit.
Advantages of NEFT
- Safe and Effective – For a flawless transfer of funds on the Internet, NEFT helps you to transfer any amount of money quickly.
- Low Processing Charges– NEFT is flexible payment options which are very economical. To utilise this facility, you don’t have to pay a huge sum of money to your bank. The processing charges are economical, and you can transfer any amount of money without any difficulty.
- Highly Dependable–NEFT, an integral aspect of Internet banking, is a highly dependable method of making payments and receiving funds online. In India, most of the banks are regulated under the norms set by RBI and, hence, the Internet banking facility too is quite safe.
- Rapid Settlement–Unlike the regular banking methods of fund transfer, NEFT transfer is really quick, and you can enjoy rapid settlement of accounts, thereby improving the overall functionality of your business.
NEFT System Transaction Procedure
Step 1: Firstly, the remitter has to provide the requisite information like
- Beneficiary’s Name.
- Beneficiary’s Account number
- Beneficiary’s Account type ( cash credit, loan account, etc.)
- Bank name, location & base branch in which the beneficiary account is held.
- IFSC code of beneficiary bank etc. to start the process of NEFT.
Step 2: The bank branch at which the fund transfer request originated, prepares a message and sends it to its pooling centre (also called the NEFT Service Centre).
Step 3: The pooling centre forwards the message to the NEFT Clearing Centre (operated by the National Clearing Cell, RBI, Mumbai) to be included in the next available batch.
Step 4: The RBI at the clearing centre sorts the transaction bank-wise and prepares to account entries to receive funds from(debit) the originating banks and give the funds to (credit) the destination banks. Therefore, bank-wise remittance messages are forwarded to the destination banks through their polling centre (the NEFT Service Centre).
Step 5: The destination banks receive the remittance messages from the Clearing Centre and pass on the credit to the beneficiary accounts.
FAQs
What is NEFT?
NEFT stands for National Electronic Funds Transfer. It is a nation-wide payment system facilitating one-to-one funds transfer.
How does NEFT work?
NEFT works on a deferred settlement basis, where transactions are processed in batches. Customers initiate fund transfers electronically through internet banking, mobile banking, or by visiting their bank branches. The transactions are then settled in batches at scheduled intervals throughout the day.
What information do I need to initiate an NEFT transaction?
To initiate an NEFT transaction, you need the following information:
- Beneficiary’s name
- Beneficiary’s account number
- Beneficiary bank’s name
- Beneficiary bank’s branch IFSC (Indian Financial System Code) code
- Amount to be transferred
- Your account details
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Company Registration in Jaipur | Company Registration in Delhi | Company Registration in Pune | Company Registration in Hyderabad | Company Registration in Bangalore | Company Registration in Chennai | Company Registration in Kolkata | Company Registration in Mumbai | Company Registration in India | Company Registration in Gurgaon | Company Registration in Noida | Company Registration in lucknow
Complete CA Services
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Most read resources
tnreginet |rajssp | jharsewa | picme | pmkisan | webland | bonafide certificate | rent agreement format | tax audit applicability | 7/12 online maharasthra | kerala psc registration | antyodaya saral portal | appointment letter format | 115bac | section 41 of income tax act | GST Search Taxpayer | 194h | section 185 of companies act 2013 | caro 2020 | Challan 280 | itr intimation password | internal audit applicability | preliminiary expenses | mAadhar | e shram card | 194r | ec tamilnadu | 194a of income tax act | 80ddb | aaple sarkar portal | epf activation | scrap business | brsr | section 135 of companies act 2013 | depreciation on computer | section 186 of companies act 2013 | 80ttb | section 115bab | section 115ba | section 148 of income tax act | 80dd | 44ae of Income tax act | west bengal land registration | 194o of income tax act | 270a of income tax act | 80ccc | traces portal | 92e of income tax act | 142(1) of Income Tax Act | 80c of Income Tax Act | Directorate general of GST Intelligence | form 16 | section 164 of companies act | section 194a | section 138 of companies act 2013 | section 133 of companies act 2013