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What is NEFT?
National Electronic Funds Transfer (NEFT) is a mode of online funds transfer that is introduced by the Reserve Bank of India (RBI). It quickly transfers money between banks throughout India. A bank branch must be NEFT-enabled for a customer to be able to transfer the funds to another party.
NEFT is an electronic payment system that allows one-to-one fund transfers across the country. Using this facility, any account holder can electronically transfer funds from any bank branch to any individual having an account with any other bank branch in the country that participates in the NEFT scheme. You can also transfer funds via NEFT using digital modes of internet banking and mobile banking. NEFT Full Form
NEFT payment gateway is owned and controlled by the Reserve Bank of India (RBI). As per the RBI guidelines, NEFT transactions can be made 24*7, 365 days
National Electronic Funds Transfer (NEFT) is an Indian system of electronic transfer of money from one bank to another. It was introduced by Reserve Bank of India. It is an electronic fund transfer system that is based on Deferred Net Settlement (DNS) which settles transaction in batches. NEFT Full Form
A bank branch must to be NEFT-enabled to take part in NEFT fund transfer. It takes usually one day to transfer the fund from one account to the beneficiary account. Settlements and clearance of the funds take place in batches according to the guidelines of the RBI.
The National Electronic Fund Transfer (NEFT) is payment platform which is used nation-wide by many banks. This allows the easy and hassle-free transfer of money from one bank account to another bank account. With the world slowly shifting to online banking, the concept NEFT has become very popular in the country and is an easy way of transferring funds. It eliminates the need to visit the bank to transfer funds, as you can transfer funds from while being at home. NEFT Full Form
What is the full form of NEFT?
The full form of NEFT is the National Electronic Funds Transfer.
How NEFT Works?
Transfer of funds via NEFT is simple and convenient.
Benefits of NEFT
- It is economical to use NEFT for money transfer.
- NEFT is built on a secure platform.
- No need of using a cheque or a demand draft (DD) for money transfer.
- Transferring money does not require you to visit the bank.
- Initiate funds transfer online.
- The transfer can be completed faster, with convenience.
NEFT System Transaction Procedure
The transaction process involved in NEFT is explained below in step by step 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.
The National Electronic Funds Transfer system is one of the various methods of online money transfer. It is regulated by the RBI and hence, works as per the guidelines laid down by RBI.
- NEFT is a one-to-one payment facility
- NEFT transactions can be processed only between the banks that offer NEFt-enabled services
- Transaction made through NEFT do not take place in real-time; implying that it takes a few days for NEFT transactions to complete
- Before December 2019, RBI had fixed timings during which NEFT transactions can be processed. Any NEFT transaction will be processed only between 8:00 AM and 6:30 PM from Monday to Friday, and 8:00 AM to 12:00 PM on Saturdays. However, from 2020, NEFT transactions can be performed 24*7
- To transfer funds through NEFT, you must add beneficiaries on the internet banking portal of your required bank
- There are no limits on the amount of NEFT transactions
- There is a fee applicable on all NEFT transactions; the amount varies from Rs. 2.5 to Rs. 25, depending on the amount being transferred
- As per RBI guidelines, the payments made via NEFT are processed and settled in batches of half-hour
How to make an NEFT transfer
The procedure for National Electronic Funds Transfer (NEFT) is mentioned below: NEFT Full Form
Step 1: Log on to the internet banking page of your bank.
Step 2: In the home screen, choose the ‘Fund Transfer’ option.
Step 3: Choose the ‘NEFT’ option on the funds’ transfer page.
Step 4: Choose the beneficiary from the list to send money.
Step 5: If you wish to add a new beneficiary, click on the ‘Add Beneficiary’ button on the page. Enter details such as account number, name, IFSC, bank branch, and type of account.
Step 6: Verify the entered details and confirm.
Step 7: Enter the 4-digit OTP you receive on the registered mobile number to confirm the beneficiary addition.
Step 8: After the prescribed time, the beneficiary added will be ready for fund transfer.
Step 9: Choose the beneficiary, select the bank account from which funds must be transferred, enter the amount to be transferred, and click the ‘Confirm’ button to initiate the transaction.
Charges Applicable on NEFT Transactions
No charges are levied on NEFT transactions initiated via the internet or mobile banking channels. However, if you make an NEFT transfer from a bank branch, you will need to pay certain charges as under:
- Up to Rs. 2.50 + GST for transactions up to Rs. 10,000.
- Up to Rs. 5 + GST for transactions above Rs. 10,000 and less than Rs. 1 lakh.
- Up to Rs. 15 + GST for transactions above Rs. 1 lakh and less than Rs. 2 lakh.
- Up to Rs. 25 + GST for transactions above Rs. 2 lakh.
NEFT – Transaction Timings
Earlier, the NEFT transaction timings for most banks was between 8 a.m. And 6 p.m. from Monday to Friday and 8 a.m. to 12 p.m. on Saturdays. However, with effect from 16 December 2019, you can transfer money via NEFT 24×7. Money can be transferred via NEFT on holidays and weekends as well.
How to Pay Credit Card Bill using NEFT
Step 1: Log in to your bank’s internet banking account
Step 2: The next step is to add the credit card as a beneficiary. For this you should know the IFSC code of your credit card
Step 3: Proceed to enter the credit card number as the account number and other relevant details
Step 4: Once the credit card is registered as a payee, go to the ‘NEFT Funds Transfer’ option and make a fund transfer towards your credit card by entering the bill amount
Does NEFT come with a transfer limit?
You can initiate an NEFT fund transfer starting from Re.1. On the other hand, RBI has not set any maximum limit for the same. When it comes to cash transactions, you can transfer up to Rs.50,000 per transaction. Also, there is no limit on the total amount you can transfer. Few banks have set their own upper limit, such as HDFC Bank has set the upper limit of Rs.25 lakh per day per customer ID via online NEFT.
Who is Eligible to Complete a NEFT Transaction?
The list of bank branches that come under the NEFT scheme is provided by the Reserve Bank of India. Corporates, firms, and individuals who have a bank account under the NEFT scheme will be eligible to make NEFT transactions. Individuals who do not have a bank account can also make a NEFT transaction by visiting the bank branch and providing the relevant details.