NATIONAL ELECTRONIC FUND TRANSFER (NEFT)

Dec. 17, 2019

Giving a big boost to digital funds movement, the Reserve Bank of India (RBI) operationalised round-the-clock (24 X 7 basis) availability of the National Electronic Fund Transfer (NEFT). RBI also asked the banks not to levy any charges on NEFT transfer from savings bank account holders.

About:

The NEFT system, which was first introduced in the late 1990s as the Electronic Fund Transfer (EFT) system, attained its present avatar in 2005.
Now that NEFT is 24x7, 365 days a year, is it still different from IMPS? Yes, very much so.
For one, NEFT transactions will only be credited to the beneficiary account in batches, unlike the Immediate Payment Service (IMPS) system, which transfers money in real time.
Secondly, unlike IMPS, for which banks charge a certain amount depending on the quantum of money being transferred, NEFT transactions have been made free by RBI from July 1, earlier this year.
Thirdly, unlike IMPS, which can only be transacted online, a NEFT transaction can be done offline by visiting a bank branch.
Additionally, as per the RBI mandate, there's no limit on the amount of money that may be transferred via NEFT — unlike IMPS, where a maximum of Rs 2 lakh per day can be transferred.