Q.1. What is NEFT?
Ans: National Electronic Funds Transfer
(NEFT) is a nation-wide payment system facilitating one-to-one funds
transfer. Under this Scheme, individuals, firms and corporates can
electronically transfer funds from any bank branch to any individual,
firm or corporate having an account with any other bank branch in the
country participating in the Scheme.
Q.2. Are all bank branches in the country part of the NEFT funds transfer network?
Ans: For being part of the NEFT funds
transfer network, a bank branch has to be NEFT- enabled. The list of
bank-wise branches which are participating in NEFT is provided in the
website of Reserve Bank of India
Q.3. Who can transfer funds using NEFT?
Ans: Individuals, firms or corporates
maintaining accounts with a bank branch can transfer funds using NEFT.
Even such individuals who do not have a bank account (walk-in
customers) can also deposit cash at the NEFT-enabled branches with
instructions to transfer funds using NEFT. However, such cash
remittances will be restricted to a maximum of Rs.50,000/- per
transaction. Such customers have to furnish full details including
complete address, telephone number, etc.NEFT, thus, facilitates
originators or remitters to initiate funds transfer transactions even
without having a bank account.
Q.4. Who can receive funds through the NEFT system?
Ans: 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 NEFT enabled destination bank branch in the country.
The NEFT system also facilitates one-waycross-border transfer of funds from India to Nepal. This is known as the Indo-Nepal Remittance Facility Scheme. A remitter can transfer funds from any of the NEFT-enabled branches in 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
The NEFT system also facilitates one-waycross-border transfer of funds from India to Nepal. This is known as the Indo-Nepal Remittance Facility Scheme. A remitter can transfer funds from any of the NEFT-enabled branches in 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
Q.5. Is there any limit on the amount that could be transferred using NEFT?
Ans: No. There is no limit – either
minimum or maximum – 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.
Q.7. Whether the system is centre specific or has any geographical restriction?
Ans: No. There is no restriction of centres or
of any geographical area within the country. The NEFT system takes
advantage of the core banking system in banks. Accordingly, the
settlement of funds between originating and receiving banks takes
places centrally at Mumbai, whereas the branches participating in NEFT
can be located anywhere across the length and breadth of the country.
Q.6. What are the operating hours of NEFT?
Ans : Presently, NEFT operates in
hourly batches - there are twelve settlements from 8 am to 7 pm on
week days (Monday through Friday) and six settlements from 8 am to 1
pm on Saturdays.
Q.7. How does the NEFT system operate?
Step-1 : An individual / firm /
corporate intending to originate transfer of funds through NEFT has to
fill an application form providing details of the beneficiary (like
name of the beneficiary, name of the bank branch where the beneficiary
has an account, IFSC of the beneficiary bank branch, account type and
account number) and the amount to be remitted. The application form will
be available at the originating bank branch. The remitter authorizes
his/her bank branch to debit his account and remit the specified amount
to the beneficiary. Customers enjoying net banking facility offered by
their bankers can also 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 (complete
address and telephone number, etc.) to the branch. 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 transactions destination bank-wise and prepares
accounting entries to receive funds from the originating banks (debit)
and give the funds to the destination banks(credit). 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 inward remittance messages from the Clearing Centre and pass on the
credit to the beneficiary customers’ accounts.
Q.8. What is IFSC?
Ans : IFSC or Indian Financial System
Code is an alpha-numeric code that uniquely identifies a bank-branch
participating in the NEFT system. This is an 11 digit code with the
first 4 alpha characters representing the bank, and the last 6
characters representing the branch. The 5th character is 0 (zero). IFSC
is used by the NEFT system to identify the originating / destination
banks / branches and also to route the messages appropriately to the
concerned banks / branches.
Q.9. How can the IFSC of a bank-branch be found?
Ans: Bank-wise list of IFSCs is available with
all the bank-branches participating in NEFT.List of bank-wise branches
participating in NEFT and their IFSCs is available on the website of
Reserve Bank of India . All the banks have also been advised to print the IFSC of the branch
on cheques issued to their customers. For net banking customers many
banks have enabled online search / pop-up of the IFSC of the
destination bank branch.
Further, banks have also been advised to ensure
that their branch staff provide necessary assistance to customers in
filling out the required details, including IFSC details, in the NEFT
application form, and also help in ensuring that there is no mismatch
between the IFSC code and branch details of beneficiary branch as
provided by the customer.
Q.10. What are the processing or service charges for NEFT transactions?
Ans: The structure of charges that can be levied on the customer for NEFT is given below:
a) Inward transactions at destination bank branches (for credit to beneficiary accounts)
– Free, no charges to be levied from beneficiaries
– Free, no charges to be levied from beneficiaries
b) Outward transactions at originating bank branches – charges applicable for the remitter
- For transactions up to Rs 10,000 : not exceeding Rs 2.50 (+ Service Tax)
- For transactions above Rs 10,000 up to Rs 1 lakh: not exceeding Rs 5 (+ Service Tax)
- For transactions above Rs 1 lakh and up to Rs 2 lakhs: not exceeding Rs 15 (+ Service Tax)
- For transactions above Rs 2 lakhs: not exceeding Rs 25 (+ Service Tax)
c) Charges applicable for transferring
funds from India to Nepal using the NEFT system (under the Indo-Nepal
Remittance Facility Scheme) is available on the website of RBI
With effect from 1st July 2011, originating banks are required
to pay a nominal charge of 25 paise each per transaction to the
clearing house as well as destination bank as service charge. However,
these charges cannot be passed on to the customers by the banks.
Q.11. When can the beneficiary expect to get the credit to his bank account?
Ans: The beneficiary can expect to get
credit for the first ten batches on week days (i.e., transactions from 8
am to 5 pm) and the first five batches on Saturdays (i.e.,
transactions from 8 am to 12 noon) on the same day. For transactions
settled in the last two batches on week days (i.e., transactions
settled in the 6 and 7 pm batches) and the last batch on Saturdays
(i.e., transactions handled in the 1 pm batch) beneficiaries can expect
to get credit either on the same day or on the next working day
morning (depending on the type of facility enjoyed by the beneficiary
with his bank).
Q.12. Who should be contacted in case of non-credit or delay in credit to the beneficiary account?
Ans: In case of non-credit or delay in credit
to the beneficiary account, the NEFT Customer Facilitation Centre (CFC)
of the respective bank can be contacted (the remitter can contact his
bank’s CFC; the beneficiary may contact the CFC of his bank). Details
of NEFT Customer Facilitation Centres of banks are available on the
websites of the respective banks. The details are also available on the
website of Reserve Bank of India
If the issue is not resolved
satisfactorily, the NEFT Help Desk (or Customer Facilitation Centre of
Reserve Bank of India) at National Clearing Cell, Reserve Bank of
India, Mumbai may be contacted through e-mail
or by addressing correspondence to the General Manager, Reserve Bank
of India, National Clearing Centre, First Floor, Free Press House,
Nariman Point, Mumbai – 400 021.
Q.13. What will happen if credit is not afforded to the account of the beneficiary?
Ans: If it is not possible to afford
credit to the account of the beneficiary for whatever reason,
destination banks are required to return the transaction (to the
originating branch) within two hours of completion of the batch in
which the transaction was processed.
For example, if a customer submits a
fund transfer request at 12.05 p.m. to a NEFT-enabled branch, the
branch in turn forwards the message through its pooling centre to the
NEFT Clearing Centre for processing in the immediately available batch
which (say) is the 1.00 pm batch. If the destination bank is unable to
afford the credit to the beneficiary for any reason, it has to return
the transaction to the originating bank, not later than in the 3.00 pm
batch. On receiving such a returned transaction, the originating bank
has to credit the amount back to account of the originating customer.
To conclude, for all uncredited transactions, customers can reasonably
expect the funds to be received back by them in around 3 to 4 hours
time.
Q.14. Can NEFT be used to transfer funds from / to NRE and NRO accounts?
Ans: Yes. NEFT can be used to transfer
funds from or to NRE and NRO accounts in the country. This, however, is
subject to the adherence of the provisions of the Foreign Exchange
Management Act, 2000 (FEMA) and Wire Transfer Guidelines.
Q.15. Can remittances be sent abroad using NEFT?
Ans: No. However, a facility is
available to send outward remittances to Nepal under the Indo-Nepal
Remittance Facility Scheme.
Q.16. What are the other transactions that could be initiated using NEFT?
Ans: Besides personal funds transfer,
the NEFT system can also be used for a variety of transaction including
payment of credit card dues to the card issuing banks. It is necessary
to quote the IFSC of the beneficiary card issuing bank to initiate the
bill payment transactions using NEFT.
Q.17. Can a transaction be originated to draw (receive) funds from another account?
Ans : No. NEFT is a credit-push system i.e.,
transactions can be originated only to transfer / remit funds to a
beneficiary.
Q.18. Would the remitter receive an acknowledgement once the funds are transferred to the account of the beneficiary?
Ans: Yes. In case of successful credit
to the beneficiary's account, the bank which had originated the
transaction is expected to send a confirmation to the originating
customer (through SMS or e-mail) advising of the credit as also
mentioning the date and time of credit. For the purpose, remitters need
to provide their mobile number / e-mail-id to the branch at the time
of originating the transaction.
Q.19. Is there a way for the remitter to track a transaction in NEFT?
Ans: Yes, the remitter can track the
NEFT transaction through the originating bank branch or its CFC using
the unique transaction reference number provided at the time of
initiating the funds transfer. It is possible for the originating bank
branch to keep track and be aware of the status of the NEFT transaction
at all times.
Q.20. What are the pre-requisites for originating a NEFT transaction?
Ans : Following are the pre-requisites for putting through a funds transfer transaction using NEFT –-
Originating and destination bank branches should be part of the NEFT network
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Beneficiary details such as beneficiary name, account number and account type, name and IFSC of the beneficiary bank branch should be available with the remitter
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For net banking customers, some banks provide the facility to automatically pop-up the IFSC once name of the destination bank and branch is highlighted / chosen / indicated / keyed in.
Q.21. What are the benefits of using NEFT?
Ans: NEFT offers many advantages over the other modes of funds transfer:-
The remitter need not send the physical cheque or Demand Draft to the beneficiary.
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The beneficiary need not visit his / her bank for depositing the paper instruments.
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The beneficiary need not be apprehensive of loss / theft of physical instruments or the likelihood of fraudulent encashment thereof.
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Cost effective.
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Credit confirmation of the remittances sent by SMS or email.
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Remitter can initiate the remittances from his home / place of work using the internet banking also.
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Near real time transfer of the funds to the beneficiary account in a secure manner.
