- Q.1. What is NEFT?
- National Electronic Funds Transfer (NEFT) is a nation-wide system that facilitates individuals to electronically transfer funds from any bank branch to any other bank branch within the country.
- Are all bank branches in the country part of the NEFT funds transfer network?
- For being part of the NEFT funds transfer network a bank branch has to be NEFT-enabled and should have IFS code number. As at end-November 2009 as many as 62,000 branches / offices of 94 banks in the country (out of around 75,000 bank branches) are NEFT-enabled. Steps are being taken to further widen the coverage both in terms of banks and branches.
- How can one know which bank branches are part of the NEFT network?
- The list of bank branches participating in the NEFT system is available on the website of Reserve Bank of India at http://www.rbi.org.in/scripts/neft.aspx.Details will also be available with the banks / branches participating in the NEFT system. Many banks have printed their IFS Code Number in the cheque leaves.
- Who can transfer funds using NEFT?
- Individuals, firms or corporate bodies maintaining accounts with a bank branch can transfer funds using NEFT.
- Whether walk in customers can transfer funds by remitting Cash?
- Even such individuals, firms or corporates who do not have a bank account (walk in customers) can also deposit cash (Up to Rs.50000/-) at the branch with instructions to transfer funds using NEFT. A separate Transaction Code (No. 50)has been allotted in the NEFT system to facilitate walk-in customers to deposit cash and transfer funds to a beneficiary. Such customers have to furnish full details including complete address, telephone number etc.
- Who can receive funds through the NEFT system?
- Individuals, firms or Corporates maintaining accounts with a bank branch can receive funds through the NEFT system. It is, therefore, necessary for the beneficiary to have an account with the destination bank branch in the country.
The NEFT system also facilitates one-way cross-border transfer of funds from India to Nepal under transaction code no. 51. This is known as the Indo-Nepal Remittance Facility Scheme. A remitter can transfer funds up to Indian Rupees 50,000/- from any of the NEFT-enabled branches in India to Nepal, irrespective of whether the beneficiary in Nepal maintains an account with a bank branch in Nepal or not. The beneficiary would receive funds in Nepalese Rupees. Further details on the Indo-Nepal Remittance Facility Scheme are available on the website of Reserve Bank of India at http://rbidocs.rbi.org.in/rdocs/content/pdfs/84489.pdf.
- Is there any limit on the amount that could be transferred using NEFT?
- No. There is no limit ( either minimum or maximum ) on the amount of funds that could be transferred using NEFT. However, for walk-in customers mentioned at Q.5 and Q.6 above, including those remitting funds under the Indo-Nepal Remittance Facility Scheme the maximum amount that could be transferred is Rs. 50,000 only.
- whether the system is centre specific or has any geographical restriction?
- No, there is no restriction of centers or of any geographical area inside the country. The NEFT system takes advantage of the centralized accounting system in banks. For the purpose, the account of a bank that is originating or receiving funds transfer instructions is operated centrally at Mumbai.The branches participating in NEFT can, however, be located anywhere across the length and breadth of the country.
- What are the operating hours of NEFT?
- NEFT facility is available 24X7 w.e.f. 16-12-2019.
- How does the NEFT system operate?
- Step-1 : An individual / firm / corporate Body intending to originate or transfer funds through NEFT has to fill-in an application form giving details of the beneficiary name, account type and account number the beneficiary bank branch with IFSC Number of the Bank Branch. The application form will be available at the originating bank branch. The originator authorizes the branch to debit his account and remit the specified amount to the beneficiary. Customers enjoying net banking facility offered by their bankers can initiate the funds transfer request online. Some banks offer the NEFT facility even through the ATMs.Walk-in customers will, however, have to give their contact details like complete address and telephone Number to the branch in addition. This will help the branch to refund the money to the customer in case credit could not be afforded to the beneficiary's bank account or the transaction is rejected /returned for any reason.
Step-2 : The originating bank branch prepares a message and sends the message 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 National Clearing Cell, Reserve Bank of India, Mumbai) to be included for the next available batch.
Step-4 : The Clearing Centre sorts the funds transfer transaction messages destination bank-wise and prepares set-off entries to receive funds from (debit) the originating banks and give the funds to (credit) the destination banks. Thereafter, bank-wise remittance messages are forwarded to the destination banks through their pooling centre (NEFT Service Centre).
Step-5 :The destination banks receive the remittance messages received from the Clearing Centre and pass on the credit to the beneficiary accounts.
- What is IFSC?
- IFSC or Indian Financial System Code is an alpha-numeric code that uniquely identifies a bank-branch participating in the NEFT system. This is a 11 digit code with the first 4 characters representing the bank, and the last 6 characters representing the branch. The 5th character is a 0 (zero). IFSC is used by the NEFT system to route the messages to the destination banks.
- How can the IFSC of a bank-branch be found?
- Bank-wise list of IFSCs is available with all the bank-branches participating in NEFT. List of bank-branches participating in NEFT and their IFSCs are available on the website of Reserve Bank of India at http://www.rbi.org.in/scripts/neft.aspx. IFSC code numbers are normally printed on cheques issued by branches to their customers. For net banking customers many banks have also enabled online search / pop-up of the IFSC of the destination bank branch.
- What are the processing or service charges for NEFT transactions?
- a) Inward transactions at destination bank branches (for credit to beneficiary accounts) - Free, NO charges to be levied from beneficiaries.
b) Outward transactions at originating bank branches (charges for the remitter)
-For transactions up to Rs. 10000 - Rs. 2.25 + GST.
-For transactions of above Rs. 10000 to 1 lakh - Rs. 4.75 + GST.
-For transactions of above Rs. 1 lakh to 2 lakhs- Rs.14.75 + GST.
-For transactions of above Rs. 2 lakhs- - Rs. 24.75 + GST.
Note: Charges under the Indo-Nepal Remittance Facility Scheme are:
Rs. 50 for remittances up to Rs. 5,000 and Rs. 75 for remittances above Rs.5,000.
- When can the beneficiary expect to get the credit to his bank account?
- The beneficiary can expect to get credit for all the batches within two hours .For example transactions received in 8 am batch has to be processed by the beneficiary bank with in 2 hours (B+2)and if any returns are there the same has to be sent back to sender bank within the prescribed time limit of B+2( i.e,before 11 am batch).
The timelines for remittances to Nepal using the NEFT system (under the Indo-Nepal Remittance Facility Scheme) are separate at http://rbidocs.rbi.org.in/rdocs/content/pdfs/84489.pdf.
- Who should be contacted in case of non-credit or delay in credit to the beneficiary account?
- The customer to contact the originating Branch for non-credit/delay in credit. One should be aware that Any hurdles/problems at the Message sending Bank / RBI Server / beneficiary bank get reflected in transferring funds. If all the Intermediaries including the servers work smoothly there should not be any delay in crediting the account beyond 2 hours from the originating batch.
- what will happen if credit is not afforded to the account of the beneficiary?
- If it is not possible to afford credit to the account of the beneficiary for whatever reasons, funds are returned to the remitter (originating customer).
- Can NEFT be used to transfer funds from / to NRI or NRE accounts?
- Yes. NEFT can be used to transfer funds from or to a Non-Resident Indian (NRI) or Non-Resident External (NRE) accounts in the country. This is, however, is subject to applicability of provisions of the Foreign Exchange Management Act, 2000 (FEMA).
- Can inward foreign remittances be received through NEFT?
- No. The NEFT system can be used only for remitting Indian Rupees between the participating bank branches in the country.
- Can remittances abroad be sent using NEFT?
- No. However, a facility is available to send outward remittances to Nepal under the Indo-Nepal Remittance Facility Scheme.
- What are the other transactions that could be initiated using NEFT?
- The NEFT system can be used to pay credit card dues. A separate Transaction Code (No. 52) has been allotted in the NEFT system to facilitate the payment of credit card dues to member banks. It is necessary to quote the IFSC of the beneficiary card issuing bank to initiate the bill payment transactions using NEFT.
- Can a transaction be originated to receive funds from another account?
- No. NEFT is a credit-push system i.e., transactions can be originated only to transfer funds to a beneficiary.
- Would the originator receive an acknowledgement once the funds are transferred to the account of the beneficiary?
- Yes this facility available thorough an alert / message ( sms / mail ) to the customer once credit is afforded to the account of the beneficiary.