NEFT Charges

NEFT Full Form & Its Meaning in Banking

NEFT stands for National Electronic Funds Transfer. The Reserve Bank of India owns and operates the NEFT system, which is a nationwide centralized payment system (RBI). It is a batch-based electronic transfer framework based on Deferred Net Settlement (DNS).

To participate in NEFT fund transfers, a bank branch must be NEFT-enabled. Typically requires one day is required for the transfer. The RBI's guidelines dictate that settlements and fund clearance take place in batches.

The RBI website contains the protocols that various stakeholders involved in the system must follow.

Charges for NEFT

Individual customers are not subject to any minimum or maximum limits. The amount of an NEFT transaction for walk-in customers who deposit cash cannot exceed Rs. 50,000. The charges for NEFT are as follows:

Slab Charges through branch

Up to Rs. 10,000 Rs.2.5

Above Rs. 10,000 and up to Rs. 100,000 Rs.5

Above Rs. 100,0000 and up to Rs. 200,000 Rs.15

Above Rs. 200,000 Rs.25

Steps for NEFT transfer

To send money with NEFT, simply connect to your online banking account and add the recipient as a beneficiary. You'll need to enter information like their name, account number, account type, and IFSC code in the Add New Payee area. When you pick NEFT as your chosen way of transfer and enter the amount to be transferred, the fund transfer will be completed.

Advantages of NEFT system

NEFT offers the accompanying benefits for funds transfer:

Nonstop accessibility on the entire day of the year

Using NEFT for money transfers is cost-effective.

There is no need to use a check or a demand draft (DD) for money transfers because NEFT is built on a secure platform.

You don't need to go to the bank to transfer cash.

Begin an online money transfer.

The transfer can be completed more quickly and conveniently.

Operation of NEFT system

The flow of an NEFT transaction is shown in the steps below:

Step 1: An individual, firm, or corporation wishing to transfer funds via NEFT can use his or her bank's internet/mobile banking service to initiate an online funds transfer request. For the beneficiary to be added to the remitter's internet/mobile banking module, the remitter must provide information such as the beneficiary's name, branch name where the beneficiary has an account, the IFSC of that branch, account type, and account number, and so on. After adding a beneficiary, the remitter can start an online NEFT funds transfer by authorizing a debit from his or her account.

Alternatively, the remitter can initiate NEFT funds transfer through branch/off-line mode by visiting his or her bank branch. The customer must fill out the beneficiary information on the NEFT application form, which is available at the bank branch, and authorize the branch to debit his or her account for the amount specified on the NEFT application form.

Step 2: The sending bank creates a message and sends it to its pooling center, also known as the NEFT Service Centre.

Step 3: The pooling center sends the message to the RBI's NEFT Clearing Centre, which includes it in the next available batch.

Step 4: The Clearing Centre sorts beneficiary bank-by-beneficiary bank funds transfer transactions and creates accounting entries to receive funds from originating banks (debit) and distribute funds to beneficiary banks (credit). Following that, bank-by-bank remittance messages are forwarded to the beneficiary banks via their pooling center (NEFT Service Centre).

Step 5: Beneficiary banks receive inward remittance messages from the Clearing Centre and credit the beneficiary customers' accounts.

Indian Financial System Code (IFSC)

The IFSC is an alpha-numeric code that particularly recognizes an NEFT-empowered bank branch. It's an 11-digit code with the first four alpha characters denoting the bank and the last six alpha characters denoting the branch. Zero is the fifth character. The NEFT system uses the IFSC to identify the originating and destination banks/branches, as well as to route messages to the appropriate banks/ branches.

The list of participating bank branches in NEFT, as well as their IFSCs, is also available on the RBI website.

The IFSC of the branch should be imprinted on all checks given to clients, as instructed by RBI. Read more