What is NEFT? What is RTGS? Difference between NEFT and RTGS pdf file

NEFT and RTGS are two main mechanisms to transfer money from one bank say SBI to another bank say PNB in India. Both  schemes are started by the RBI for the benefit of the customers which allow accounts holders in the banks to electronically  transfer the funds intra-bank.

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NEFT – National Electronic Fund Transfer

Electronic Funds Transfer (EFT) is replaced by NEFT. In November 2005, a more secure system was introduced for facilitating one-to-one funds transfer of individuals, corporate, firms.

It is a system of transfer of funds between two banks on net settlement basis, which means that each individual transfer from one bank account to another bank account is not settled or processed at the same moment, it is done in batches. A lot of transactions are settled in one go in each batches. 

Ø  Minimum and Maximum limit of funds

There is no upper and lower limit in fund transfer.

Ø  Operating hours

Presently, NEFT operates in hourly batches - there are twelve settlements from 8 am to 7 pm on week days (Monday-Friday) and six settlements from 8 am to 1 pm on Saturdays.

Ø  Processing / Service Charges

a) Inward transactions -no charges to be levied 

b) Outward transactions– charges applicable for the receiver bank account holder.

·         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 lakh: not exceeding Rs 15

(+ Service Tax)

·         For transactions above Rs 2 lakh: not exceeding Rs 25 (+ Service Tax)

RTGS – Real Time Gross Settlement

It is a system of money transfer between two banks in real time basis, which means the moment one bank account transfer the money to another bank account, it get settled at that time itself on real time basis between the banks, but the beneficiary bank has to make the final settlement to the bank account within two hours of getting the money. It means receiver bank can settle the remittance within no time or can take maximum of 2 hours.  RTGS is the fastest possible money transfer between two banks in India through a secure channel.

Ø  Minimum and Maximum limit of funds

The minimum limit of remittance is Rs 2 lakh but there is no maximum limit.

Ø  Operating hours

The RTGS service window for customer's transactions is available from 9.00 am to 4.30 pm on week days (Monday-Friday)  and from 9.am to 1.30 pm on Saturdays for settlement at the RBI end.

Ø  Processing / Service Charges

(a) Inward Transactions :  no charge to be levied

(b) Outward Transactions:

·         Rs 2 lakh to Rs 5 lakh : Rs 25- 30 per transaction

·         Above Rs 5 lakh : not exceeding Rs 50- 55 per transactions

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