Meaning of National
Electronic Funds Transfer (NEFT) System and How does the NEFT system operate
Q.1. What is NEFT
System?
Ans National Electronic Funds
Transfer (NEFT) system is a nation wide funds transfer system to facilitate
transfer of funds from any bank branch to any other bank branch.
Q. 2. Are all bank branches in
the system part of the funds transfer network?
Ans No. As on January 31, 2007, 18500 branches of 53 banks are participating. Steps
are being taken to widen the coverage both in terms of banks and branches.
Q.3. Whether the
system is centre specific or has any geographical restriction?
Ans No, there is no restriction of centres or of any geographical
area inside the country. The system uses the concept of centralised accounting
system and the bank’s account, that are sending or receiving the funds transfer
instructions, gets operated at one centre, viz, Mumbai only. The individual branches participating in NEFT could be
located anywhere across the country, as detailed in the list provided on our
website.
Q.4. What is the
funds availability schedule for the beneficiary?
Ans The beneficiary gets the credit on the same Day or the next Day depending on the
time of settlement.
Q.5. How does the
NEFT system operate?
Step-1: The remitter fills in the
NEFT Application form giving the particulars of the beneficiary (bank-branch,beneficiary’s name, account
type and account number) and authorises
the branch to remit the specified amount tothe beneficiary by raising a debit to the remitter’s account. (This can also be
done by using net banking services offered by some of the banks.)
Step-2: The remitting branch prepares
a Structured Financial Messaging Solution (SFMS) message and
sends it to its Service Centre for NEFT.
Step-3: The Service Centre forwards the same to the local RBI
(National Clearing Cell, Mumbai) to be included for the next available
settlement. Presently, NEFT is settled in six batches at 0930, 1030, 1200,
1300, 1500 and 1600 hours on weekdays and 0930, 1030 and 1200 hours on
Saturdays
Step-4: The RBI at the clearing centre sorts the transactions
bank-wise and prepares accounting entries of net debit or credit for passing on
to the banks participating in the system. Thereafter, bank-wise remittance
messages are transmitted to banks.
Step-6: The receiving banks process the remittance messages
received from RBI and effect the credit to the beneficiaries’ accounts.
Q.6. How is this
NEFT System an improvement over the existing RBI-EFT System?
Ans The RBI-EFT system is confined to the 15 centres where RBI
is providing the facility, where as there is no such restriction in NEFT as it
is based on the centralised concept. The detailed list of branches of various banks participating in
NEFT system is available on our website. The system also uses the
state-of-the-art technology for the communication, security etc, and thereby
offers better customer service.
Q.7. How is it
different from RTGS and EFT?
Ans: NEFT is an electronic payment system to transfer funds from
any part of country to any other part of the country and works on Net
settlement, unlike RTGS that works on gross settlement and EFT which is
restricted to the fifteen centers only where RBI offices are located.
Q.8. Any limit on
the amount of individual transaction?
Ans There is no value limit for individual transactions.
Q.9. What about
Processing Charges/Service Charges
Ans While RBI has waived the processing charges till March 31,
2008, levy of service charges by banks is left to the discretion of the
respective banks. The bank-wise details of charges levied are available on the
RBI website.
Q.10. How I will
know which are the branches participating in the NEFT?
Ans RBI publishes the list of bank branches participating in the NEFT on its website i.e. www.rbi.org.in .
Q.11. What is IFS
Code (IFSC)? How it is different from MICR code?
Ans Indian Financial System Code (IFSC) is an alpha numeric code
designed to uniquely identify the bank-branches in India. This is
11 digit code with first 4 characters representing the banks code, the next
character reserved as control character (Presently 0 appears in the fifth
position) and remaining 6 characters to identify the branch. The MICR code has
9 digits to identify the bank-branch.
Q.12. How I will
know, what is the IFS Code of my bank-branch?
Ans RBI had since advised all the banks to print IFSC on cheques
leaves issued to their customers. You may also contact your bank-branch and get
the IFS Code of that branch.
Q.13. Whom I can
contact, in case of non-credit or delay in credit to the beneficiary account?
Ans Contact your bank / branch. If the issue is not resolved
satisfactorily, the Customer Service Department of RBI at-
The Chief General Manager,
Reserve Bank of India,
Customer Service Department,
1st Floor, Amar Building, Fort,
Mumbai-400001
Q.14. Is it
necessary to have a bank account to originate the NEFT transaction?
Ans Yes, NEFT is an account to account funds transfer system.
Q.15. Is it
necessary that the beneficiary should have an account at the
destination bank-branch?
Ans Yes, NEFT is an account to account funds transfer system.
Q.16. Can I receive
foreign remittances through NEFT?
Ans This system can be used only for remitting Indian Rupee
among the participating banks within the country.
Q.17. Can I send
remittances abroad using the NEFT?
Ans No
Q.18. Can I
originate a transaction to receive funds from another account?
Ans No
Q.19. Can I
send/receive funds from/to NRI accounts?
Ans: Yes, subject to applicability of provisions of FEMA
Q.20. Would the
customer receive an acknowledgement of money credited to the beneficiary?
Ans: No, however electronic acknowledgement is generated for the
customer that his money is received by the beneficiary at the sender branch.
Q.21. Would the
remitting customer get back the money if it is not credited to the
beneficiary’s account?
Ans: Yes, the remitting customer gets back the money if it is
not credited to the beneficiary account.
Q.22. Till what
time NEFT service window is available?
Ans: There are six settlements at 0930, 1030, 1200, 1300, 1500
and 1600 hours on weekdays and 0930, 1030 and 1200 hours on Saturdays.
Q.23. What is the
essential information that the remitting customer would have to furnish for the
remittance to be effected?
Ans: The essential information that the remitting customer has
to furnish is:
·
Beneficiary details such as beneficiary name and account number
·
Name and IFSC of the beneficiary bank branch.
Q.24. Is there any
way a remitting customer can track the remittance transaction?
Ans: The remitting customer can track the remitting transaction
through the remitting branch only, as the remitting branch is informed about
the status of the remitted transactions.
