RBI on Thursday (06.06.2019) informed banks that it has decided to waive charges levied on NEFT & RTGS transactions and accordingly instructed the bank to pass on the benefit to their customers. Instruction on this regard will be issued within a week.
RTGS& NEFT transactions are the fastest electronic funds transfer systems available in India. Under the above systems, funds can be transferred from a bank by its customer to their own account or third parties having their account with another bank across the country. The RTGS and NEFT transactions are distinguished by the processing time taken by them. In RTGS, the processing of instructions takes place instantly at the time they are received rather than at some later time whereas NEFT operates in batches on hourly basis.
RTGS stands acronym for ‘Real Time Gross Settlement’. The ‘Real Time’ means the processing of instructions takes place instantly at the time they are received. ‘Gross Settlement’ means the settlement of funds transfer instructions takes place separately for each instruction. Under RTGS Scheme, individuals, firms and corporate can electronically transfer large value funds to accounts of individuals, firms or corporates having accounts with any other bank branch in the country participating in the Scheme. Funds transfer operation takes place on instruction by instruction basis continuously during the RTGS business hours.
NEFT stands acronym for National Electronic Fund Transfer. NEFT operates on a Deferred Net Settlement (DNS) basis which settles transactions in batches. At present, NEFT operates in hourly batches will be between 8 am to 7 pm with twenty three hourly settlements (like 8.30 am,9.30 am 10.30 and so on up to 6.30 pm). In DNS, the settlement takes place with all transactions received till the particular cut-off time. Under NEFT transactions individuals, firms and corporates can electronically transfer their funds to any individuals, firms or corporates having an account with any other bank branch in the country participating in the Scheme. Any transaction initiated after a designated settlement time would have to wait till the next designated settlement time. There is no restriction or limit on the amount of funds that could be transferred using NEFT. However, maximum amount per transaction is limited to Rs.50, 000/- for cash-based remittances and remittances to Nepal. Click NEFT-RTGS for full details on RTGS and NEFT transactions.
Related articles:
1.What is IMPS/ mobile phone banking?
2.What is Point of Sale (POS) business?
3.What is NACH (What is national automated clearing house)?
5.What is ECS credit/debit system?
6.What is RuPay card?
7.What is e-wallet?
