What is NEFT-National Electronic Fund Transfer
NEFT –The term NEFT stands for National Electronic Fund Transfer. It is an electronic form of transfer of funds from one bank account to another bank account based on net settlement. The system is owned and operated by the Reserve Bank of India.
How NEFT-National Electronic Fund Transfer functions
An account holder who wishes to remit funds through NEFT/RTGS can visit his Bank and give remittance instructions to his bank. He has to fill in the details required for remittance in the form and submit the same to the Bank. Accordingly, the bank will initiate remittances on its customer’s behalf.
And/or Accountholder can remit the funds through NEFT/RTGS by using the internet/mobile banking facility offered by his Bank. The remitter should provide all the details required such as the amount of remittance, name of the beneficiary in whose favour amount to be remitted, Beneficiary’s account number and its type, Beneficiary’s Bank’s name and branch and IFSC number of receiving branch of beneficiary’s Bank etc. to add beneficiary in his internet/mobile banking module.
After adding a beneficiary in his internet/mobile banking module the account holder can remit the funds by authorizing debit to his account.
The remitter’s bank sends the message to its pooling centre i.e, NEFT Service Centre and the pooling centre forwards the message to the NEFT Clearing Centre, operated by the RBI, to be included for the next available batch.
NEFT system is available on all days throughout the year i.e., on 24x7x365 days basis.
Details required to remit funds through NEFT:
- Amount of remittance
- The account number which is to be debited
- Name of the beneficiary in whose favour amount to be remitted
- Beneficiary’s account number and its type
- Beneficiary’s Bank’s name and branch
- IFSC number of receiving branch of beneficiary’s Bank
Amount of Remittance
There is no upper limit of amount to be remitted specified by RBI through NEFT, But Banks can decide the limit at the discretion of their Management. Any person can remit funds through NEFT. Even the person not having an account in a Bank can remit the funds up to Rs.50,000/- per transaction by depositing cash with the remitting bank, subject to furnishing the additional details such as a complete address, telephone numbers, etc. apart from the details required as mentioned above.
UTR (Unique Transaction Reference) number
Once the transaction is initiated, the remitter can get UTR (Unique Transaction Reference) number from the remitting Branch, which can be used to track the status of the transaction. The transaction gets realized within 2 hours from the batch settlement. After completion of the transaction remitter of funds receives a confirmation message.
In NEFT same as in the case of RTGS, the beneficiary bank credits the amount taking the account number as the base. Therefore remitter should take adequate care and provide the correct account number of the beneficiary.
If a transaction is not credited to the beneficiary’s account and/or returned by the beneficiary Banker for any reason, the beneficiary’s bank must return the transaction to the remitter’s bank within two hours of completion of the batch. If it fails to do so then it will have to pay penal interest at the rate of the current RBI LAF Repo Rate plus two percent to the remitter for the period of delay without waiting for a specific claim by the customer in this regard.
Charges on NEFT Transactions
RBI waived off all its charges for NEFT transactions from member banks. No bank can charge its customers for inward NEFT Transactions. 1st January 2020 onwards banks are advised not to charge their Saving Bank account holders for NEFT fund transfers initiated online. Further Reserve Bank of India put a cap on the charges to be charged by Banks and set a limit , the Banks thus are allowed to charge below that limit only.
Under NEFT remitter can transfer funds from India to Nepal using the NEFT system under the Indo-Nepal Remittance Facility Scheme and the details about Charges applicable for transferring from India to Nepal are available on the website of RBI .
Any complaints from the customers if not resolved within 30 days by the Bank, then the customer can approach BANKING OMBUDSMAN under the RBI Banking Ombudsman Scheme, 2006. Details available on RBI Website at https://rbi.org.in/Scripts/AboutUsDisplay.aspx?pg=BankingOmbudsmen.htm
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