The Indian financial system has become advanced in the past few years. Earlier, people used to visit banks to do any kind of transactions, but now with a few touches on your mobile phones, you can easily manage your bank accounts. Similarly, using NEFT you can transfer money in no time from your savings or current account to another person’s account. But are you familiar with the full form of NEFT? NEFT stands for National Electronic Fund Transfer and it is a nationwide payment system monitored by the Reserve Bank of India. It is a convenient way of sending money to other bank accounts. Many individuals, firms, and corporate companies enjoy the benefits of NEFT.
Features of NEFT aka National Electronic Fund Transfer
- The NEFT Facility was initiated by the Reserve Bank of India in 2005.
- NEFT is a convenient way of sending money to other bank accounts.
- It is a fund transfer system used by many individuals, companies, and firms.
- You can either use the Net Banking Service or can visit the bank to do the NEFT.
- The funds are usually transferred in half-hourly batches.
- Both the sender and the receiver bank must have the NEFT facility.
- The Reserve Bank of India manages the NEFT payment gateway.
- You can transfer funds to any part of India using this facility.
- National Electronic Fund Transfer can be done 24×7 and 365 days.
Process of National Electronic Fund Transfer
- Go to your internet banking portal and log in using your Customer ID and Password.
- Then visit the Fund Transfer section and select NEFT to transfer money.
- You will have to add the beneficiary in which you will have to enter the name, account number, IFSC Code, and branch name of the beneficiary’s bank account.
- After adding the beneficiary successfully, enter the amount you are willing to send.
- Choose the account from which you want the amount to be debited.
- Finally, Click on confirm to finish the whole process.
How NEFT Works?
- The process of NEFT starts when you send the funds to the beneficiary.
- When you generate the NEFT request, your bank branch creates a message and sends it to its NEFT Service Centre.
- Then from the NEFT Service Centre, the message is forwarded to the NEFT Clearing Centre that is operated under RBI.
- Then the Clearing Centre sorts money transfer transactions destination bank-wise and does the accounting entries to take funds from the sender (debit) and gives the funds to the receiver’s bank (credit).
- After which a remittance message is sent to the destination banks through their respective NEFT Service Centre.
- Finally, the destination bank gets the inward remittance messages from the Clearing Centre and makes the credit entry to the beneficiary’s accounts.
- NEFT is available 24X7 and 365 days
- The average time for transaction completion is 30 minutes.
- Sometimes, it can be stretched to 2-3 hours and sometimes it gets settled in 10 minutes.
When an NEFT Fails?
- If there is the non-existence of an account.
- When the individual enters a wrong IFSC Code.
- When the account of the beneficiary is frozen.
Due to the above reasons, National Electronic Fund Transfer can fail. But, the amount will be deposited back to the sender’s account within 2 hours if the NEFT transaction has failed.
Sonow you know that the full form of NEFT is National Electronic FundTransfer and it can be used to transfer money quickly. The maximumlimit of NEFT is different for different banks and the NEFT chargesare also different. So, before you do an NEFT, make sure that youhave all the details of the beneficiary’s account. It is one of thefastest modes of transferring money from one account to another.