NEFT. What is NEFT? Short Notes on National Electronic Funds Transfer (NEFT). All about National Electronic Funds Transfer (NEFT).
National Electronic Fund Transfer (NEFT) system is a nation-wide system that facilitates individuals, firms and corporates to electronically transfer funds from any bank branch to any individual, firm or corporate having an account with any other bank branch in the country.
The Reserve Bank of India (RBI) maintains this payment network. NEFT system is a funds transfer mechanism where transfer of money takes place from one bank to another on a deferred net settlement basis.
For being part of the NEFT funds transfer network, a bank branch has to be NEFT-enabled. Indian Financial System Code (IFSC) is required to perform a transaction using NEFT. IFSC code identifies a specific branch of a bank.
Important Points to Know about NEFT:
1. The National Electronic Funds Transfer enables electronic transfer of funds between two NEFT-enabled bank branches. It can also be used to transfer funds from or to NRE/NRO accounts in India. Remittance is not allowed to a foreign country, except Nepal.
2. The transactions are bunched up and settled in batches at specified times. There are 12 settlements from 8 am to 7 pm on weekdays, and six from 8 am to 1 pm on Saturdays. If a transaction is initiated after a batch settlement time, it’s deferred to the next batch.
3. There is no minimum or maximum limit on the amount that can be transferred under NEFT. Even those who do not have a bank account with a branch can deposit cash at the NEFT-enabled branches, but such remittances can be made up to a maximum of Rs 50,000 per transaction.
4. The credit for the first 10 batches on weekdays (8 a.m. to 5 p.m.) and the first five batches on Saturdays (8 a.m. to 12 noon) takes place on the same day. For the other batches, the funds may be credited on the next working day.
5. The inward transactions for NEFT are free, while the outward transactions are charged. This ranges from a maximum of Rs 2.50 for amounts up to Rs 10,000 to a maximum of Rs 25 for transfer amounts above Rs 2 lakh.