NATIONAL ELECTRONICS FUNDS TRANSFER

Before the computerization of banks, money was transferred from one account to another account in a different branch by way of Demand drafts,Mail Transfer and Telegraphic transfer.

Now all the banks are transferring money either by way of National Electronic Funds Transfer (NEFT) or by way of Real Time Gross Settlement system(RTGS). Banks have also provided these facilities directly to the customers through their Internet Banking accounts thus enabling the customer to transfer the money to the customer of other banks.

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.

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 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.50000 - 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.

There is no restriction of centers 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.

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.

However many banks have still not accepted this technology and the awareness levels are yet to be extended.This technology will make the future internet banking very secure and easy.