NEFT AND RTGS PAYMENT SYSTEMS -- A FEW POINTS
By Shubhra -
January 13,
2016
The paper instruments popular for transfer
of funds are cheques and demand drafts. There are also systems which provide
you paperless
transactions. A customer
just has to give some details for the funds transfer to a bank. The beneficiary
or the drawee of payment does not have to move to a bank branch for depositing
the paper instruments. The one transferring funds can also initiate the process
at home using internet banking. Transactions are secured.
The two popular systems NEFT and RTGS for funds transfer
are explained in this article.
National Electronic Funds Transfer (NEFT) is a nation-wide payment system facilitating
one-to-one funds transfer. Under this Scheme, individuals, firms and corporates
can electronically transfer funds from any bank branch to any individual, firm
or corporate having an account with any other bank branch in the country participating in the
Scheme.
It is an electronic fund
transfer system that operates on a Deferred Net Settlement (DNS) basis which settles
transactions in batches. By the word ‘batches’ it mean that instructions received for
transferring the money will not be done as soon the request is
received. So, the settlement takes place with all transactions received
till the particular cut-off time.
In NEFT system, presently
there are hourly batches – there are twelve settlements from 8 am to 7 pm on
week days and six settlements from 8 am to 1 pm on Saturdays. This can be
explained by an example: If you submit your request of transfer of
payment at say, 1: 10 PM on any of the week day, the settlement will get
started at next batch i.e. 2 PM to 3 PM batch along with all the requests which
were submitted in the 1 PM to 2 PM batch.
·
Not every
bank can transfer or receive money through NEFT system. For this the bank
should be NEFT enabled. A list of NEFT enabled bank branches is available on
RBI website, and also you can obtain this information from your bank.
·
There is no minimum or maximum limit for opting for a NEFT
payment system. However, if you do not have an account in a bank, then you can
only transfer up to Rs 50,000 per transaction.
·
NEFT payment
system is also available to transfer funds to Nepal under Indo-Nepal Remittance Facility scheme. While transferring funds
to Nepal, there is a maximum limit of Indian Rupees 50,000 and the beneficiary
in Nepal will get them in Nepalese Rupees. Any customer of bank or
walk-in-customer can do a transfer of up to Rs 50,000 to Nepal.
·
Banks charge
Processing Charges / Service Charges for NEFT transaction.
Details you need to give while requesting for
NEFT transfer:
·
Your bank
account number with bank, so that bank can debit amount from that account.
·
The amount to
be remitted.
·
Beneficiary’s
name.
·
Beneficiary’s
bank’s and branch’s name (Bank branch should be NEFT enabled).
·
Beneficiary’s
account number.
·
IFS code of
bank branch of beneficiary. (IFS Code of all bank branches is available on RBI
website)
The acronym ‘RTGS’ stands
for Real Time Gross
Settlement. Real Time means that the processing of instructions
start at same time when they are received and not at some later time. Gross settlement means that the
settlement of funds transfer instructions occurs individually (on an
instruction by instruction basis).
·
Not every
bank can transfer or receive money through RTGS system. For this the bank
should be RTGS enabled. A list of RTGS enabled bank branches is
available on RBI website, and also you can obtain this information from your
bank.
·
So this is in
contrast with the NEFT system in which settlements take place in batches.
·
In contrast
with NEFT system, there is a minimum limit of Rs 2,00,000 to be transferred
through RTGS. Though there is no
maximum limit.
·
Banks charge
Processing Charges / Service Charges for RTGS transaction.
Details you need to give while requesting for
RTGS transfer:
·
Your bank
account number with bank, so that bank can debit amount from that account.
·
The amount to
be remitted.
·
Beneficiary’s
name.
·
Beneficiary’s
bank’s and branch’s name (Bank branch should be NEFT enabled).
·
Beneficiary’s
account number.
·
IFS code of
bank branch of beneficiary. (IFS Code of all bank branches is available on RBI
website)
http://www.affairscloud.com/payment-systems-neft-rtgs/
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