8/13/2019 What Are NEFT and RTGS

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What are NEFT and RTGS?National Electronic Fund Transfer ( NEFT ) and Real Time Gross Settlement(RTGS ) allow individuals, companies and firms to transfer funds from onebank to another. You can check the RBI website for a list of NEFT and RTGS-enabled branches of your bank. These facilities can only be usedfor transferring money within the country. To opt for these, you need to fill aform providing your or the beneficiarys details name, bank branch wherethe account is held, the Indian Financial System Code , a unique code foridentifying the branch, and the account number and type. You have tosubmit a cheque while opting for this facility. You can also transfer fundsthrough net banking . These are third-party transfers and the option isavailable under the same header on your net banking home page.

How much can be transferred?There is no ceiling on the minimum or maximum amount that can betransferred through NEFT. You can even transfer Re 1. However, a minimumof Rs 2 lakh must be transferred through the RTGS service. There is no capon the maximum amount, though. However, banks may restrict the amountyou can transfer in one day. For example, HDFC Bank allows a maximum ofRs 10 lakh to be transferred in a day.

What are the charges applicable?According to RBI, banks cannot levy any charge for inward remittances or onreceipt of funds. However, it has capped the charges on outward transfersthrough NEFT and RTGS. For transfers through the former, you need to payaround Rs 5-25, depending on the amount. Banks cannot charge more thanRs 5 for any transfer up to Rs 1 lakh, Rs 15 for Rs 1-2 lakh and Rs 25 forthose above Rs 2 lakh. Under RTGS, you have to pay Rs 25 for Rs 2-5 lakhand Rs 50 for anything above Rs 5 lakh.

How are the two different?NEFT operates on a deferred net settlement (DNS) basis and settlestransactions in batches. The settlement takes place with all transactionsreceived till a particular cut-off time. It operates in hourly batches thereare 11 settlements from 9 am to 7 pm on weekdays and five between 9 am

and 1 pm on Saturdays. Any transaction initiated after the designated timewould have to wait till the next settlement time. In RTGS, transactions areprocessed continuously, all th rough the business hours. RBIs settlementtime is 9 am to 4:30 pm on weekdays and 9 am to 1:30 pm on Saturdays.Banks can function within this time frame or change it. Here, transfers madeare quick and can be helpful in emergencies.

What if the amount does not get credited?If the transaction fails, the beneficiarys bank must return the amount toyour bank within two hours and the transaction must be reversed. Also, the

bank must transfer the amount to your account within 30 minutes ofreceiving the same. The process can work quickly for RTGS . But, in case ofNEFT the entire process could take an additional three-four hours.

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